As filed with the Securities and Exchange Commission on November 29, 2005
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE GAP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 94-1697231 | |
(State or jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Two Folsom Street, San Francisco, CA 94105
(Address of Principal Executive Offices) (Zip Code)
Gap Inc. Supplemental Deferred Compensation Plan
(Full Title of the Plan)
Lauri Shanahan, Esq.
The Gap, Inc.
Two Folsom Street
San Francisco, CA 94105
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (650) 952-4400
Copies to:
Nancy S. Gerrie
McDermott Will & Emery LLP
227 W. Monroe Street
Chicago, IL 60606-6936
Calculation of Registration Fee
Title of securities to be registered |
Amount to be
registered |
Proposed
maximum offering price per share* |
Proposed
maximum aggregate offering price |
Amount of
registration fee* |
||||||||
Deferred Compensation Obligations** |
$ | 40,000,000 | 100 | % | $ | 40,000,000 | $ | 4,280 |
* | Estimated solely for the purpose of calculating the registration fee. |
** | The Obligations are unsecured obligations of The Gap, Inc. to pay deferred compensation in the future in accordance with the terms of the Gap Inc. Supplemental Deferred Compensation Plan. |
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by the Registrant with the Securities and Exchange Commission are hereby incorporated by reference in this Registration Statement:
(i) | The Registrants Annual Report on Form 10-K for the fiscal year ended January 29, 2005. |
(ii) | The Registrants Quarterly Reports on Form 10-Q for the quarter ended April 30, 2005, and for the quarter ended July 30, 2005. |
(iii) | The Registrants Current Reports on Form 8-K filed on February 3, February 24, March 3, March 4, March 16, March 24, March 31, April 7, April 15, April 19, April 21, May 5, May 11, May 11, May 19, June 2, July 7, July 20, August 4, August 18, September 1, September 28, October 6, November 3, November 8, and November 17, 2005 (other than the portions of these documents not deemed to be filed). |
(iv) | The description of the Companys common stock set forth in the Companys Registration Statement on Form 8-B relating thereto, including any amendment or report filed for the purpose of updating such description. |
All documents filed by the Company after the date of this registration statement pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment (that indicates all securities offered have been sold or deregisters all securities then remaining unsold), shall be deemed to be incorporated by reference in this registration statement (other than the portions of these documents not deemed to be filed) and to be a part hereof from the date of
Item 4. Description of Securities
The securities being registered represent obligations (the Obligations) of the Company to pay deferred compensation in the future in accordance with the terms of the Gap Inc. Supplemental Deferred Compensation Plan (the Plan). The Plan is effective January 1, 2006.
The Obligations are general unsecured obligations of the Company to pay deferred compensation in the future according to the terms of the Plan from the general assets of the Company, or from a trust established for that purpose by the Company, and rank equally with other unsecured and unsubordinated indebtedness of the Company from time to time outstanding.
The amount of eligible compensation to be deferred by each participant is determined in accordance with the terms of the Plan based on elections by the participant. Additional amounts are credited annually to participants accounts in the form of a Company matching contribution of up to a specified percentage of employee participants eligible compensation deferred each year.
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Contributions credited to a participants Plan account are credited or debited with notional investment gains and losses, appreciation and depreciation equal to the experience of selected investment funds offered under the Plan and elected by the participant. One of the investment funds offered under the Plan provides a return based on the experience of the Companys Common Stock. The Company has reserved the right under the Plan to change the investment funds offered at any time, and participants elections to direct the investment of their accounts in the notional investment funds may, but are not required to, be followed under the terms of the Plan.
The Obligations are payable upon a participants termination of employment, death, or on a date or dates selected by the participant in accordance with the terms of the Plan, and are denominated and payable in the form of United States dollars. The Obligations generally are payable in the form of a lump sum distribution or in installments, at the election of the participant made in accordance with the terms of the Plan and subject to exceptions in the case of death or termination of employment prior to age 50.
Participants or, in the case of the participants death, their beneficiaries, may not sell, transfer, anticipate, assign, hypothecate or otherwise dispose of any right or interest in the Plan. A participant may designate one or more beneficiaries to receive any portion of Obligations payable in the event of the participants death.
The Company also reserves the right to amend the Plan at any time, or to terminate the Plan in accordance with the restrictions under Section 409A of the Internal Revenue Code.
The Obligations are not convertible into any other security of the Company. The Obligations will not have the benefit of a negative pledge or any other affirmative or negative covenant on the part of the Company. Each participant in the Plan will be responsible for enforcing his or
Item 5. Interests of Named Experts and Counsel
Inapplicable.
Item 6. Indemnification of Directors and Officers
The Companys Certificate of Incorporation provides that, to the fullest extent permitted by the General Corporation Law of the State of Delaware (the GCL), as such law currently exists or may be amended so long as any such amendment authorizes action further eliminating or limiting the personal liabilities of directors, a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director.
Under the Bylaws of the Company, each director and officer of the Company is entitled to indemnification to the fullest extent permitted by the laws of the State of Delaware against all expenses, liabilities and losses, judgments, fines and amounts paid in settlement incurred in connection with any pending, threatened or completed action, suit or proceeding in which he or she may be involved by reason of the fact that he or she is or was a director or officer of the
3
Company or serving at the request of the Company as director or officer of an entity affiliated with the Company, provided that the standards of conduct specified in the GCL have been satisfied. Section 145 of the GCL empowers a corporation to indemnify any director or officer, or former director or officer, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding (other than a derivative action) by reason of the fact that he or she is or was a director or officer or is or was serving at the request of the corporation as an agent of another entity, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful. In regard to a derivative action, indemnification may not be made in respect of any matter as to which an officer or director is adjudged to be liable unless the Delaware Court of Chancery, or the court in which such action was brought, shall determine that such person is fairly and reasonably entitled to indemnification.
The Company carries insurance policies indemnifying its directors and officers against liabilities arising form certain acts performed by them in their respective capacities as such. The policies also provide for reimbursement of the Company for any sums it may be required or permitted to pay pursuant to applicable law to its directors and officers by way of indemnification against liabilities
Item 7. Exemption From Registration Claimed
Inapplicable.
Item 8. Exhibits
4
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume 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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% 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 (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 each filing of the Registrants annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
5
applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California on the 29th day of November, 2005.
THE GAP, INC. | ||
(Registrant) | ||
By |
/s/ PAUL S. PRESSLER |
|
Paul S. Pressler | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dated indicated.
Signature |
Title |
Date |
||
Principal Executive Officer: | ||||
/s/ PAUL S. PRESSLER |
President and Chief Executive Officer | November 29, 2005 | ||
Paul S. Pressler | ||||
Principal Financial and Principal Accounting Officer: |
||||
/s/ BYRON H. POLLITT, JR. |
Executive Vice President and Chief Financial Officer | November 29, 2005 | ||
Byron H. Pollitt, Jr. |
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Directors:
* |
Director | November 29, 2005 | ||
Howard P. Behar | ||||
* Adrian D. P. Bellamy |
Director | November 29, 2005 | ||
* |
Director | November 29, 2005 | ||
Domenico De Sole | ||||
* |
Director | November 29, 2005 | ||
Donald G. Fisher |
||||
* |
Director | November 29, 2005 | ||
Doris F. Fisher |
||||
* |
Director | November 29, 2005 | ||
Robert J. Fisher |
||||
* |
Director | November 29, 2005 | ||
Penelope L. Hughes |
||||
* |
Director | November 29, 2005 | ||
Bob L. Martin |
||||
* |
Director | November 29, 2005 | ||
Jorge P. Montoya |
||||
* |
Director | November 29, 2005 | ||
Paul S. Pressler |
||||
* |
Director | November 29, 2005 | ||
James M. Schneider |
||||
* Mayo A. Shattuck III |
Director | November 29, 2005 | ||
Margaret C. Whitman |
Director |
* By: |
/s/ LAURI M. SHANAHAN |
|
Lauri M. Shanahan | ||
Attorney-in-Fact |
A majority of the members of the Board of Directors.
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EXHIBIT INDEX
9
Exhibit 4.1
GAP INC.
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
(Effective January 1, 2006)
McDermott Will & Emery LLP
Chicago
TABLE OF CONTENTS
PAGE
|
||||
SECTION 1 |
INTRODUCTION |
1 | ||
1.1 |
Purpose |
1 | ||
1.2 |
Effective Date; Plan Year |
1 | ||
1.3 |
Plan Administration |
1 | ||
1.4 |
Unfunded Nature of Plan |
1 | ||
SECTION 2 |
DEFINITIONS |
2 | ||
2.1 |
Account |
2 | ||
2.2 |
Accounting Date |
2 | ||
2.3 |
Beneficiary |
2 | ||
2.4 |
Board |
2 | ||
2.5 |
Bonus |
2 | ||
2.6 |
Bonus Deferrals |
2 | ||
2.7 |
Code |
2 | ||
2.8 |
Committee |
2 | ||
2.9 |
Company |
3 | ||
2.10 |
Compensation |
3 | ||
2.11 |
Compensation Committee |
3 | ||
2.12 |
Compensation Deferrals |
3 | ||
2.13 |
Effective Date |
3 | ||
2.14 |
Eligible Individual |
3 | ||
2.15 |
Employee |
4 | ||
2.16 |
Employer |
4 | ||
2.17 |
ERISA |
4 | ||
2.18 |
Gap Stock Fund |
4 | ||
2.19 |
Investment Funds |
4 | ||
2.20 |
Matching Contributions |
4 | ||
2.21 |
Participant |
4 | ||
2.22 |
Plan |
5 | ||
2.23 |
Plan Year/Plan Year Quarter/Fiscal Year |
5 | ||
2.24 |
Retirement |
5 | ||
2.25 |
Social Security Taxable Wage Base |
5 | ||
2.26 |
Spouse |
5 | ||
2.27 |
Termination Date |
5 | ||
2.28 |
Other Definitions |
5 | ||
SECTION 3 |
ELIGIBILITY AND PARTICIPATION |
6 | ||
3.1 |
Initial Eligibility |
6 | ||
3.2 |
Cessation of Participation |
6 | ||
3.3 |
Eligibility for Matching Contributions |
6 |
TABLE OF CONTENTS
(continued)
PAGE
|
||||
SECTION 4 |
DEFERRALS AND CONTRIBUTIONS |
7 | ||
4.1 |
Compensation Deferrals |
7 | ||
4.2 |
Bonus Deferrals |
7 | ||
4.3 |
Matching Contributions |
8 | ||
4.4 |
No Election Changes During Plan Year |
9 | ||
4.5 |
Crediting of Deferrals |
9 | ||
4.6 |
Reduction of Deferrals or Contributions |
9 | ||
SECTION 5 |
NOTIONAL INVESTMENTS |
10 | ||
5.1 |
Investment Funds |
10 | ||
5.2 |
Investment Fund Elections |
10 | ||
5.3 |
Investment Fund Transfers |
10 | ||
SECTION 6 |
ACCOUNTING |
11 | ||
6.1 |
Individual Accounts |
11 | ||
6.2 |
Adjustment of Accounts |
11 | ||
6.3 |
Accounting Methods |
11 | ||
6.4 |
Statement of Account |
11 | ||
SECTION 7 |
VESTING |
12 | ||
SECTION 8 |
FUNDING |
13 | ||
SECTION 9 |
DISTRIBUTION OF ACCOUNTS |
14 | ||
9.1 |
Distribution of Accounts Prior to Retirement Date |
14 | ||
9.2 |
Distribution of Accounts After Retirement Date |
15 | ||
9.3 |
Key Employees |
15 | ||
9.4 |
Mandatory Cash-Outs of Small Amounts |
16 | ||
9.5 |
Designation of Beneficiary |
16 | ||
9.6 |
Reemployment |
17 | ||
9.7 |
Special Distribution Rules |
17 | ||
SECTION 10 |
GENERAL PROVISIONS |
18 | ||
10.1 |
Interests Not Transferable |
18 | ||
10.2 |
Employment Rights |
18 | ||
10.3 |
Litigation by Participants or Other Persons |
18 | ||
10.4 |
Evidence |
18 | ||
10.5 |
Waiver of Notice |
18 | ||
10.6 |
Controlling Law |
18 | ||
10.7 |
Statutory References |
19 | ||
10.8 |
Severability |
19 | ||
10.9 |
Action By the Company, the Employers or the Committee |
19 | ||
10.10 |
Headings and Captions |
19 | ||
10.11 |
Gender and Number |
19 |
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TABLE OF CONTENTS
(continued)
PAGE
|
||||
10.12 |
Examination of Documents |
19 | ||
10.13 |
Elections |
19 | ||
10.14 |
Manner of Delivery |
20 | ||
10.15 |
Facility of Payment |
20 | ||
10.16 |
Missing Persons |
20 | ||
10.17 |
Recovery of Benefits |
21 | ||
10.18 |
Effect on Other Benefits |
21 | ||
10.19 |
Tax and Legal Effects |
21 | ||
SECTION 11 |
THE COMMITTEE |
22 | ||
11.1 |
Establishment of Committee |
22 | ||
11.2 |
Committee General Powers, Rights, and Duties |
22 | ||
11.3 |
Interested Committee Member |
23 | ||
11.4 |
Compensation and Expenses |
23 | ||
11.5 |
Information Required by Committee |
23 | ||
11.6 |
Uniform Application of Rules |
23 | ||
11.7 |
Review of Benefit Determinations |
23 | ||
11.8 |
Committees Decision Final |
24 | ||
SECTION 12 |
AMENDMENT AND TERMINATION |
25 |
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GAP INC.
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
(Effective January 1, 2006)
SECTION 1 INTRODUCTION
1.1 Purpose
The Gap, Inc. (the Company) has established the Gap Inc. Supplemental Deferred Compensation Plan (the Plan), to provide certain supplemental benefits to a select group of management employees of the Employers under the Plan, and to non-employee members of the Board of Directors of the Company, who contribute materially to the continued growth, development, and future success of the Employers. The Plan is intended to comply with the American Jobs Creation Act of 2004, Code Section 409A, and related guidance. The Plan is intended to constitute an account balance plan (as defined in IRS Notice 2005-1, Q&A-9).
1.2 Effective Date; Plan Year
The Plan is hereby effective January 1, 2006. The Plan is administered on the basis of a Plan Year, as defined in subsection 2.23.
1.3 Plan Administration
As described in Section 11, the Committee shall be the administrator (as that term is defined in Section 3(16)(A) of ERISA) of the Plan and shall be responsible for the administration of the Plan; provided, however, the Committee may delegate all or any part of its powers, rights, and duties under the Plan to such person or persons as it may deem advisable. Any notice or document relating to the Plan which is to be filed with the Committee may be delivered, or mailed by registered or certified mail, postage pre-paid, to the secretary of the Committee, or to any designated Committee representative, in care of the Company, at its principal office.
1.4 Unfunded Nature of Plan
The Plan is an unfunded, nonqualified deferred compensation plan that is intended to qualify for the exemptions provided in Sections 201, 301, and 401 of ERISA. Participants (and their Beneficiaries) shall have only those rights to payments as set forth in the Plan and shall be considered general, unsecured creditors of the Employers with respect to any such rights.
SECTION 2 DEFINITIONS
2.1 Account
Account means all notional accounts and subaccounts maintained for a Participant in order to reflect his interest under the Plan, as described in Section 6.
2.2 Accounting Date
Accounting Date means each day designated by the Committee as of which the value of an Investment Fund is adjusted for notional deferrals, contributions, distributions, gains, losses, or expenses. To the extent not otherwise designated by the Committee, each Investment Fund will be valued as of each day on which the New York Stock Exchange is open for trading.
2.3 Beneficiary
Beneficiary means the person or persons to whom a deceased Participants benefits are payable under subsection 9.5.
2.4 Board
Board means the Board of Directors of the Company, as from time to time constituted.
2.5 Bonus
Bonus means an award of cash contingent upon the achievement of specified performance goals and payable to an Employee in a given year, with respect to the immediately preceding bonus performance period. Sign-on Bonus means an award of cash payable to the Employee upon or within a short period of time after date of hire, as determined in accordance with the Companys compensation policies.
2.6 Bonus Deferrals
Bonus Deferrals means the amounts credited to a Participants Bonus Deferral Account pursuant to the Participants election made in accordance with subsection 4.2.
2.7 Code
Code means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing, or superseding such section.
2.8 Committee
Committee means the Global Benefits Committee of the Company, as described in Section 11.
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2.9 Company
Company means The Gap, Inc. or any successor organization or entity that assumes the Plan.
2.10 Compensation
With respect to any Participant who is an Employee, Compensation means the Participants total remuneration from the Employer which, absent a deferral election under the Plan, would have otherwise been received by the Employee in the taxable year (excluding bonuses and taxable and nontaxable fringe benefits, and excluding overtime and commission payments; provided, however, that Compensation shall include vacation pay and vacation payouts, and all amounts contributed by an Employer pursuant to a salary reduction agreement which are not includable in the Employees gross income under sections 125, 132(f), or 402(e)(3) of the Code) payable for pay periods commencing on or after the Effective Date; provided, however, that Compensation shall be determined for these purposes without regard to the dollar limitations in effect for qualified plans under Section 401(a)(17) of the Code. With respect to any Participant who is a non-employee member of the Board, Compensation means all cash remuneration which, absent a deferral election under the Plan, would have otherwise been received by the Board member in the taxable year, payable (for Fiscal Year quarters commencing after the Effective Date) to the Board member for service on the Board and on Board committees, including any cash payable for attendance at Board meetings and Board committee meetings, but not including any amounts constituting reimbursements of expenses to Board members.
2.11 Compensation Committee
Compensation Committee means the Compensation and Management Development Committee of the Company.
2.12 Compensation Deferrals
Compensation Deferrals means the amounts credited to a Participants Compensation Deferral Account pursuant to the Participants election made in accordance with subsection 4.1.
2.13 Effective Date
Effective Date means January 1, 2006.
2.14 Eligible Individual
Eligible Individual means each non-employee member of the Board or Employee of an Employer who satisfies the requirements set forth in Section 3. With respect to Employees, Eligible Individual does not include any Employee who is employed in a country other than the United States of America (U.S.) unless he: (i) has been temporarily transferred to employment with the Employers in a non-U.S. country; (ii) is a citizen or resident alien of the U.S. at the time of the transfer; and (iii) remains on the U.S. payroll.
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2.15 Employee
Employee means a person who is employed by an Employer, is on the Employers regular payroll, and is treated and/or classified by the Employer as a common law employee for purposes of wage withholding for Federal income taxes. If a person is not considered to be an Employee of the Employer in accordance with the preceding sentence, a subsequent determination by the Employer, any governmental agency, or a court that the person is a common law employee of the Employer, even if such determination is applicable to prior years, will not have a retroactive effect for purposes of eligibility to participate in the Plan.
2.16 Employer
Employer means The Gap, Inc. and any affiliate or subsidiary of the Company as defined in Subsections 414(b) and (c) of the Code that has adopted the Plan on behalf of its Eligible Individuals with the consent of the Company.
2.17 ERISA
ERISA means the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific section of ERISA shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing, or superseding such section.
2.18 Gap Stock Fund
Gap Stock Fund means an Investment Fund offered under the Plan having a notional investment return based on the performance of the common stock of the Company, in accordance with rules and procedures established by the Committee.
2.19 Investment Funds
Investment Funds means the notional funds or other investment vehicles designated pursuant to subsection 5.1.
2.20 Matching Contributions
Matching Contributions means the amounts credited to a Participants Matching Contribution Account under the Plan by the Employer, in accordance with subsection 4.3.
2.21 Participant
Participant means an Eligible Individual who meets the requirements of Section 3 and elects to make Compensation Deferrals pursuant to Section 4.
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2.22 Plan
Plan means the Gap Inc. Supplemental Deferred Compensation Plan, as set forth in this instrument and as hereafter amended from time to time.
2.23 Plan Year/Plan Year Quarter/Fiscal Year
Plan Year means each 12-month period beginning January 1 and ending the following December 31. Plan Year Quarter means each three-month period ending March 31, June 30, September 30 and December 31. Fiscal Year means the fiscal year of the Company.
2.24 Retirement
Retirement for purposes of this Plan means, with respect to an Employee Participant, the Participants separation from service (within the meaning of Section 409A of the Code and the regulations, notices and other guidance thereunder) with the Employers, the Company and any subsidiary or affiliate of the Company as defined in Sections 414(b) and (c) of the Code after attaining age 50, and, with respect to a non-employee Board member Participant, the Participants resignation or removal from the Board after attaining age 50.
2.25 Social Security Taxable Wage Base
Social Security Taxable Wage Base means the maximum amount of earnings subject to payroll taxes in a given year, as announced annually by the Social Security Administration.
2.26 Spouse
Spouse means the person to whom a Participant is legally married under applicable state law at the earlier of the date of the Participants death or the date payment of the Participants benefits commenced and who is living on the date of the Participants death.
2.27 Termination Date
Termination Date means, with respect to an Employee Participant, the date on which the Participant has a separation from service with the Employers, the Company and any subsidiary or affiliate of the Company, as determined by the Committee (including death), and, with respect to a non-employee Board member Participant, the date on which the Board member resigns, is removed or otherwise terminates service on the Board (including death).
2.28 Other Definitions
Other defined terms used in the Plan shall have the meanings given such terms elsewhere in the Plan.
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SECTION 3 ELIGIBILITY AND PARTICIPATION
3.1 Initial Eligibility
For each Plan Year, each (a) Employee of an Employer who is employed at the level of director or higher (as determined by the Committee) and who has Compensation greater than 150% of the Social Security Taxable Wage Base for the prior Plan Year, and (b) non-employee member of the Board shall be an Eligible Individual eligible to participate in the Plan by making a deferral election pursuant to Section 4. An Eligible Individuals eligibility for any Plan Year shall be determined as of November 1 of the preceding Plan Year, based on the Eligible Individuals position and Compensation, and on the Social Security Taxable Wage Base in effect on that November 1 date.
With respect to an Employee who first becomes an Eligible Individual (by virtue of a promotion, Compensation increase, commencement of employment with the Employers, or any other reason), the determination of such eligibility shall be based on the Employees position and Compensation in effect on the date of such initial eligibility, but shall be based on the Social Security Taxable Wage Base in effect during the preceding Plan Year.
Each Eligible Individuals decision to become a Participant shall be entirely voluntary. An Eligible Individual who makes a deferral election pursuant to Section 4 shall become a Participant in the Plan.
3.2 Cessation of Participation
If a Participant ceases to be an Eligible Individual, no further Compensation Deferrals, Bonus Deferrals (if applicable) or Matching Contributions (if applicable) shall be credited to the Participants Accounts after the end of the Plan Year Quarter following the date the Participant ceases to be eligible (or, if the eligibility determination can be made by the Committee or its designee prior to the end of the Plan Year Quarter, on or as soon as administratively feasible after the date the Participant ceases to be eligible), unless he is again determined to be an Eligible Individual, but the balance credited to his Accounts shall continue to be adjusted for notional investment gains and losses under the terms of the Plan and shall be distributed to him at the time and manner set forth in Section 9. An Employee or Board member shall cease to be a Participant after his Termination Date or other loss of eligibility as soon as his entire Account balance has been distributed.
3.3 Eligibility for Matching Contributions
An Employee Participant who has satisfied the length-of-service requirements necessary to become an Eligible Employee under the GapShare 401(k) Plan, and who has made a Compensation Deferral election pursuant to subsection 4.1 herein, shall be eligible to receive Matching Contributions described in subsection 4.3.
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SECTION 4 DEFERRALS AND CONTRIBUTIONS
4.1 Compensation Deferrals
Each Plan Year, an Eligible Individual may elect to defer receipt (in increments of one percent) of up to 75 percent (with respect to Employee Eligible Individuals) or 100 percent (with respect to non-employee Board member Eligible Individuals) of his Compensation (or such other percentages as determined by the Committee) earned with respect to pay periods beginning on and after the effective date of the election (or, in the case of non-employee Board member Eligible Individuals, Compensation earned with respect to Fiscal Year quarters beginning on and after the effective date of the election); provided, however, that Compensation earned prior to the date the Participant satisfies the eligibility requirements of Section 3 shall not be eligible for deferral under this Plan. Except as otherwise provided in this subsection, a Participants deferral election for a Plan Year under this subsection must be made not later than December 31 of the preceding Plan Year with respect to Compensation earned in payroll periods (or, in the case of non-employee Board member Participants, Fiscal Year quarters) beginning on or after the following January 1 in accordance with rules established by the Committee. . An Employee or non-employee Board member who first becomes an Eligible Individual after the Effective Date (by virtue of a promotion, Compensation increase, commencement of employment with the Employers, commencement of Board service, or any other reason) shall be provided enrollment documents (including deferral election forms) with respect to his Compensation as soon as administratively feasible following such initial eligibility. Such Eligible Individual shall be permitted to defer his Compensation earned in the pay period (as soon as administratively practicable) (or, in the case of non-employee Board members, his Compensation earned in the Fiscal Year quarter) that begins following receipt of his properly completed election forms by the Committee or its designee. Any such deferral election under this subsection must be made within 30 days of the date the Employee or Board Member first becomes an Eligible Individual. If an Eligible Individual does not elect to make Compensation Deferrals during that initial 30-day period, he may not elect to make Compensation Deferrals until the next date determined by the Committee with respect to Compensation earned after the following January 1 (or, in the case of non-employee Board members, with respect to Compensation earned in the Fiscal Year quarter beginning after the following January 1).
An election to make Compensation Deferrals under this subsection 4.1 shall be irrevocable, shall remain in effect through the last pay period commencing in the calendar year to which the election applies (except as provided in subsection 4.4), and shall apply with respect to all Compensation earned for pay periods (or, in the case of non-Employee Board members, for Fiscal Year quarters) commencing in the applicable calendar year to which the election applies. If a Participant fails to make a Compensation Deferral election for a given Plan Year, such Participants Compensation Deferral election for that Plan Year shall be deemed to be zero.
4.2 Bonus Deferrals
Each Plan Year, an Eligible Individual who is an Employee may elect to defer receipt (in increments of one percent) of up to 90 percent (or such other percentage as determined by the Committee) of his Bonus for the next following Bonus performance period (generally a period
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of six months or longer, in which the Employee performs the services forming the basis for the Bonus) that begins in the Plan Year following the Plan Year of the Employees election. A Participants Bonus deferral election with respect to a Plan Year must be made at a time and in a manner determined by the Committee, in its sole discretion, but in no event shall the deferral election be made later than December 31 of the preceding Plan Year. An Employee who first becomes an Eligible Individual during a Plan Year (by virtue of a promotion, Compensation increase, commencement of employment with the Employers, or any other reason), shall not be permitted to make Bonus Deferrals until the December enrollment period next following the date of such initial eligibility, and only with respect to the Bonus performance period beginning after such December enrollment period. Notwithstanding the foregoing, an Employee who first becomes an Eligible Individual by virtue of commencement of employment with the Employers and who is eligible to receive a Sign-on Bonus shall be permitted to defer receipt of up to 90 percent (or such other amount as determined by the Committee) of his Sign-on Bonus into the Plan, but only if he makes such election within 30 days of the date he first becomes an Eligible Individual. In the event that a Participants Sign-on Bonus is revoked, rescinded or forfeited in accordance with rules established by the Company, any amount of such Sign-on Bonus deferred into the Plan, adjusted for any notional earnings or losses thereon, shall be forfeited from such Participants Account, and shall be applied to offset the Employers Matching Contributions required in succeeding Plan Years or shall be returned to the applicable Employer, at the Committees discretion. The Committee may establish procedures to limit the Investment Fund options available to a Participant with respect to Sign-on Bonus deferrals.
An election to make Bonus Deferrals under this subsection 4.2 shall be irrevocable and shall remain in effect through the end of the applicable Bonus performance period (except as provided in subsection 4.4). If a Participant fails to make a Bonus Deferral election for a given Plan Year, such Participants Bonus Deferral election for that Plan Year shall be deemed to be zero.
4.3 Matching Contributions
Matching Contributions shall be credited to the Matching Contribution Accounts of Employee Participants who have satisfied the requirements of subsection 3.3 and in accordance with the requirements of this subsection 4.3. The amount of any such Matching Contribution with respect to a Participant shall be equal to the Participants Compensation Deferrals, but in no event greater than 4% of such amount of the Participants Compensation (earned while the Participant satisfies the eligibility requirements under Section 3 of the Plan and under the GapShare 401(k) Plan) that exceeds the annual compensation limits provided under Code Section 401(a)(17) ($220,000 in 2006).
Any Matching Contributions made on behalf of Employee Participants under this Plan shall be credited to such Employee Participants Matching Contribution Accounts on an annual basis, as soon as administratively feasible after December 31 of the Plan Year, but only with respect to Employee Participants employed by an Employer on the last day of the applicable Plan Year. Notwithstanding the foregoing, Matching Contributions will also be payable as described in this subsection 4.3 to Participants not employed on the last day of the applicable Plan Year if,
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as of that date, the Participant is on an Employers payroll pursuant to a severance pay arrangement, or the Participant retired from service from the Employers in the applicable Plan Year after attaining age 60 with ten (10) years of service (as determined under the GapShare 401(k) Plan).
4.4 No Election Changes During Plan Year
A Participant shall not be permitted to change or revoke his deferral elections, except that, if a Participants status changes such that he becomes ineligible for the Plan, the Participants deferrals under the Plan shall cease as described in subsection 3.2 .
4.5 Crediting of Deferrals
The amount of deferrals pursuant to subsections 4.1 and 4.2 shall be credited to the Participants Accounts as of a date not later than 15 business days after the date on which the amount (but for the deferral) otherwise would have been paid to the Participant.
4.6 Reduction of Deferrals or Contributions
Any deferrals or contributions to be credited to a Participants Account under this Section may be reduced by an amount equal to the Federal or state income, payroll, or other taxes required to be withheld on such deferrals or contributions or to satisfy any necessary employee welfare plan contributions. A Participant shall be entitled only to the net amount of such deferral or contribution (as adjusted from time to time pursuant to the terms of the Plan).
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SECTION 5 NOTIONAL INVESTMENTS
5.1 Investment Funds
The Committee may designate, in its discretion, one or more Investment Funds for the notional investment of Participants Accounts. The Committee, in its discretion, may from time to time establish new Investment Funds or eliminate existing Investment Funds. An Investment Fund will be offered that consists of a notional investment in a Gap Stock Fund, as defined in subsection 2.18. The Investment Funds are for recordkeeping purposes only and do not allow Participants to direct any Company assets (including, if applicable, the assets of any trust related to the Plan). Each Participants Accounts shall be adjusted pursuant to the Participants notional investment elections made in accordance with this Section 5, except as otherwise determined by the Committee in its sole discretion.
5.2 Investment Fund Elections
A Participant may elect from among the Investment Funds for the notional investment of his Accounts from time to time in accordance with procedures established by the Committee. The Committee, in its discretion, may adopt (and may modify from time to time) such rules and procedures as it deems necessary or appropriate to implement the notional investment of the Participants Accounts. Such procedures may differ among Participants or classes of Participants, as determined by the Committee in its discretion. The Committee may limit, delay or restrict the notional investment of certain Participants Accounts in accordance with Committee rules in order to comply with Company policy and applicable law or to minimize regulated filings and disclosures. Any deferred amounts subject to a Participants investment election that must be so limited, delayed or restricted under such circumstances may be notionally invested in an Investment Fund designated by the Committee, or may be credited with earnings at a rate determined by the Committee, which rate may be zero. A Participants notional investment election shall remain in effect until later changed in accordance with the rules of the Committee. If a Participant does not make a notional investment election, all deferrals by the Participant and contributions on his behalf will be deemed to be notionally invested in the Investment Fund designated by the Committee for such purpose.
5.3 Investment Fund Transfers
A Participant may elect that all or a part of his notional interest in an Investment Fund shall be transferred to one or more of the other Investment Funds. A Participant may make such notional Investment Fund transfers in accordance with rules established from time to time by the Committee, and in accordance with subsection 5.2.
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SECTION 6 ACCOUNTING
6.1 Individual Accounts
The Committee will maintain in the name of each Participant, as applicable, the following Accounts, and any subaccounts under such Accounts deemed necessary or advisable by the Committee from time to time:
(a) | Compensation Deferral Account. A Compensation Deferral Account to reflect the Participants Compensation Deferrals and the notional gains, losses, expenses, appreciation and depreciation attributable thereto. |
(b) | Bonus Deferral Account. A Bonus Deferral Account to reflect the Participants Bonus Deferrals, if applicable, and the notional gains, losses, expenses, appreciation and depreciation attributable thereto. |
(c) | Matching Contribution Account. A Matching Contribution Account to reflect the Matching Contributions credited on behalf of the Participant, if applicable, and the notional gains, losses, expenses, appreciation and depreciation attributable thereto. |
The Committee may establish such rules and procedures relating to the maintenance, adjustment, and liquidation of Participants Accounts, the crediting of deferrals and contributions and the notional gains, losses, expenses, appreciation, and depreciation attributable thereto, as it considers necessary or advisable. In addition to the Accounts described above, the Committee may maintain other Accounts or subaccounts in the names of Participants or otherwise as the Committee considers necessary or desirable.
6.2 Adjustment of Accounts
Pursuant to rules established by the Committee and applied on a uniform basis, Participants Accounts will be adjusted on each Accounting Date, except as provided in Section 9, to reflect the value of the various Investment Funds as of such date, including adjustments to reflect any deferrals and contributions, notional transfers between Investment Funds, and notional gains, losses, expenses, appreciation, or depreciation with respect to such Accounts since the previous Accounting Date. The value of an Investment Fund at any Accounting Date shall be based on the fair market value of the Investment Fund, as determined by the Committee.
6.3 Accounting Methods
The accounting methods or formulae to be used under the Plan for purposes of monitoring Participants Accounts, including the calculation and crediting of notional gains, losses, expenses, appreciation, or depreciation, shall be determined by the Committee in its sole discretion. The accounting methods or formulae selected by the Committee may be revised from time to time.
6.4 Statement of Account
At such times and in such manner as determined by the Committee, but at least annually, each Participant will be furnished with a statement reflecting the condition of his Accounts.
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SECTION 7 VESTING
A Participant shall be fully vested at all times in his Compensation Deferral Account, Bonus Deferral Account (if applicable) and Matching Contribution Account (if applicable), except as otherwise provided in subsection 4.2 with respect to Sign-on Bonuses, which are subject to a one-year vesting period.
Neither the Committee nor the Employers in any way guarantee the Participants Account balance from loss or depreciation. Notwithstanding any provision of the Plan to the contrary, the Participants Account balance is subject to Section 8.
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SECTION 8 FUNDING
No Participant or other person shall acquire by reason of the Plan any right in or title to any assets, funds, or property of the Employers whatsoever, including, without limiting the generality of the foregoing, any specific funds, assets, or other property of the Employers. Benefits under the Plan are unfunded and unsecured. A Participant shall have only an unfunded, unsecured right to the amounts, if any, payable hereunder to that Participant. The Employers obligations under this Plan are not secured or funded in any manner, even if the Company elects to establish a trust with respect to the Plan. Even though benefits provided under the Plan are not funded, the Company may establish a trust to assist in the payment of benefits. All investments under this Plan are notional and do not obligate the Employers (or their delegatees) to invest the assets of the Employers or of any such trust in a similar manner.
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SECTION 9 DISTRIBUTION OF ACCOUNTS
9.1 Distribution of Accounts Prior to Retirement Date
With respect to any Participant who has a Termination Date that precedes his Retirement date, an amount equal to the Participants Accounts (including the Compensation Deferral Account, the Bonus Deferral Account, the Matching Contribution Account, and all notional earnings thereon) shall be distributed to the Participant (or, in the case of the Participants death, to the Participants Beneficiary), in the form of a single lump sum payment. Subject to Section 9.3 hereof, distribution of a Participants Accounts shall be made by the end of the calendar year in which occurs the Participants Termination Date, or such later date as shall be administratively feasible for the Committee to make such payment. Notwithstanding any provision of the Plan to the contrary, for purposes of this Subsection, a Participants Accounts shall be valued as of an Accounting Date as soon as administratively feasible preceding the date such distribution is made, in accordance with rules established by the Committee.
Notwithstanding the foregoing:
(a) In-Service Distribution Elections . A Participant who is an Employee may elect, in accordance with this Subsection, a distribution date for his Bonus Deferral and Compensation Deferral Accounts that is prior to his Termination Date (an in-service distribution). A Participants election of an in-service distribution date must: (i) be made at the time of his Bonus and Compensation Deferral election for a Plan Year; (ii) apply only to amounts deferred pursuant to that election; and (iii) be irrevocable. A Participant may elect a separate in-service distribution date with respect to a particular Plan Years Bonus Deferrals and with respect to a particular Plan Years Compensation Deferrals, provided that the applicable in-service distribution date may not be earlier than five (5) years following the Plan Year in which the applicable Bonus and/or Compensation would have been paid absent the deferral, or as further determined or limited in accordance with rules established by the Committee. In no event shall a Participant be permitted to elect an in-service distribution of his Matching Contribution Account.
(b) Board Compensation Deferrals . A Participant who is a non-employee Board member may elect, in accordance with Section 4, to elect a distribution date for his Compensation Deferral Account for any Plan Year that is prior to his Termination Date. A Participants election of a date under this subsection (b) must: (i) be made at the time of his Compensation Deferral election for a Plan Year; (ii) apply only to amounts deferred pursuant to that election; and (iii) be irrevocable. Such in-service distribution date must not be earlier than five (5) years following the Plan Year in which such Compensation would have been paid to him absent the deferral, or as further determined or limited in accordance with rules established by the Committee.
Payments made pursuant to an in-service distribution election shall be made by the end of the calendar year in which the payment was elected to be made, or such later date as shall be administratively feasible for the Committee to make such payment. For purposes of such
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payment, the value of the Participants Accounts for the applicable Plan Year shall be determined as of an Accounting Date preceding the date that such distribution is made, in accordance with rules established by the Committee. In the event a Participants Termination Date occurs prior to the date the Participant had previously elected to have an in-service distribution payment made to him, such amount shall be paid to the Participant in a single lump sum in accordance with this subsection 9.1.
9.2 Distribution of Accounts After Retirement Date
A Participant may elect to receive payments from his Accounts in the form of a single lump sum, as described in Section 9.1, or in annual installments for 5, 10, or 15 years. Such election shall not be effective if the Participants Termination Date occurs before he reaches his Retirement date (age 50) . To the extent a Participant fails to make an election, the Participant shall be deemed to have elected to receive his distribution for that Plan Year in the form of a single lump sum. A Participant may make a separate election with respect to his Bonus Deferrals for each Plan Year (as adjusted for gains and losses thereon) that provides for a different method of distribution from the method of distribution he elects with respect to his Compensation Deferrals (as adjusted for gains and losses thereon) for that Plan Year. The Participants Matching Contributions Account attributable to such Plan Year, if any (as adjusted for gains and losses thereon), shall be distributed in the same manner as his Compensation Deferral Account for such Plan Year.
(a) | Installment Elections . A Participant will be required to make his distribution election prior to the commencement of each Plan Year. |
(b) | Installment Payments . The first installment payment shall be made by the end of the calendar year in which occurs the Participants Retirement Date or death, or such later date as shall be administratively feasible for the Committee to make such payment. Succeeding payments shall be made by the end of each succeeding calendar year, or as soon as administratively feasible for the Committee to make such payment. The amount to be distributed in each installment payment shall be determined by dividing the value of the Participants Accounts as of an Accounting Date preceding the date of each distribution by the number of installment payments remaining to be made, in accordance with rules established by the Committee. In the event of the death of the Participant prior to the full payment of his Accounts, payments will continue to be made to his Beneficiary in the same manner and at the same time as would have been payable to the Participant, but substituting the Participants date of death for the Participants Retirement Date. |
9.3 Key Employees
Notwithstanding anything herein to the contrary, and subject to Code Section 409A, payment shall not be made or commence as a result of the Participants Termination Date to any Participant who is a key employee (defined below) before the date that is not less than six months after the Participants Termination Date. For this purpose, a key employee includes a
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key employee (as defined in Proposed Treasury Regulation Section 1.409A-1(i)) during the entire 12-month period determined by the Committee ending with the annual date upon which key employees are identified by the Committee, and also including any Employee identified by the Committee in good faith with respect to any distribution as belonging to the group of identified key employees, regardless of whether such Employee is subsequently determined by the Employer, any governmental agency, or a court not to be a key employee.
9.4 Mandatory Cash-Outs of Small Amounts
If the value of a Participants total Accounts equals $10,000 or less at his Termination Date (or his death), or at any time thereafter, the Accounts will be paid to the Participant (or, in the event of his death, his Beneficiary) in a single lump sum, notwithstanding any election by the Participant otherwise. Payments made on account of the Participants Termination Date shall be made on or before the later of (a) the last day of the Plan Year in which the Participants Termination Date occurs, or (b) two and one-half months after the Participants Termination Date (except as otherwise provided in subsection 9.3).
9.5 Designation of Beneficiary
Each Participant from time to time may designate any individual, trust, charity or other person or persons to whom the value of the Participants Accounts will be paid in the event the Participant dies before receiving the value of all of his Accounts. A Beneficiary designation must be made in the manner required by the Committee for this purpose. Primary and secondary Beneficiaries are permitted. A married participant designating a Beneficiary other than his Spouse must obtain the consent of his Spouse to such designation (in accordance with rules determined by the Committee). Payments to the Participants Beneficiary(ies) shall be made in accordance with subsection 9.1, 9.2 or 9.4, as applicable, after the Committee has received proper notification of the Participants death.
A Beneficiary designation will be effective only when the Beneficiary designation is filed with the Committee while the Participant is alive, and a subsequent Beneficiary designation will cancel all of the Participants Beneficiary designations previously filed with the Committee. Any designation or revocation of a Beneficiary shall be effective as only if it is received by the Committee. Once received, such designation shall be effective as of the date the designation was executed, but without prejudice to the Committee on account of any payment made before the change is recorded by the Committee. If a Beneficiary dies before payment of the Participants Accounts have been made, the Participants Accounts shall be distributed in accordance with the Participants Beneficiary designation and pursuant to rules established by the Committee. If a deceased Participant failed to designate a Beneficiary, or if the designated Beneficiary predeceases the Participant, the value of the Participants Accounts shall be payable to the Participants Spouse or, if there is none, to the Participants estate, or in accordance with such other equitable procedures as determined by the Committee.
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9.6 Reemployment
If a former Participant is rehired by an Employer, the Company or any affiliate or subsidiary of the Company described in Section 414(b) and (c) of the Code, regardless of whether he is rehired as an Eligible Individual (with respect to an Employee Participant), or a former Participant returns to service as a Board member, any payments being made to such Participant hereunder by virtue of his previous Termination Date shall cease. Upon such Participants subsequent Termination Date, his payments shall again commence in the form previously elected by such Participant in accordance with this Section 9. If a former Participant is rehired by the Employer (with respect to an Employee Participant) or returns to service as a Board member, and in either case any payments to be made to the Participant by virtue of his previous Termination Date have not been made or commenced, such Participant shall no longer be entitled to such payments until his subsequent Termination Date.
9.7 Special Distribution Rules
Except as otherwise provided herein and in Section 12, Account balances of Participants in this Plan shall not be distributed earlier than the applicable date or dates described in this Section 9. Notwithstanding the foregoing, in the case of payments: (i) the deduction for which would be limited or eliminated by the application of Section 162(m) of the Code; (ii) that would violate securities or other applicable laws; or (iii) that would violate loan covenants or other contractual terms to which an Employer is a party, where such a violation would result in material harm to an Employer; the payment may be delayed in the discretion of the Committee. In the case of a payment described in (i) above, the payment must be deferred either to a date in the first year in which the Committee reasonably anticipates that a payment of such amount would not result in a limitation of a deduction with respect to the payment of such amount under Section 162(m), or the year in which the Participants Termination Date occurs. In the case of a payment described in (ii) or (iii) above, payment will be made in the first calendar year in which the Committee reasonably anticipates that the payment would not violate loan or other similar contractual terms, the violation would not result in material harm to an Employer, or the payment would not result in a violation of securities or other applicable laws. Payments intended to pay employment taxes or payments made as a result of income inclusion of an amount in a Participants Accounts as a result of a failure to satisfy Section 409A of the Code shall be permitted at the Committees discretion at any time and to the extent provided in Proposed Treasury Regulations under Section 409A of the Code and IRS Notice 2005-1, Q&A-15, and any applicable subsequent guidance. Employment taxes shall include Federal Income Contributions Act (FICA) tax imposed under Sections 3101 and 3121(v)(2) of the Code on compensation deferred under the Plan (the FICA Amount), the income tax imposed under Section 3401 of the Code on the FICA Amount, and to pay the additional income tax under Section 3401 of the Code attributable to the pyramiding Section 3401 wages and taxes.
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SECTION 10 GENERAL PROVISIONS
10.1 Interests Not Transferable
The interests of persons entitled to benefits under the Plan are not subject to their debts or other obligations and, except as may be required by the tax withholding provisions of the Code or any states income tax act, may not be voluntarily or involuntarily sold, transferred, alienated, assigned, or encumbered. A Participants interest in the Plan is not transferable pursuant to a qualified domestic relations order.
10.2 Employment Rights
The Plan does not constitute a contract of employment, and participation in the Plan shall not give any Employee the right to be retained in the employ of an Employer, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. The Employers expressly reserve the right to discharge any Employee at any time.
10.3 Litigation by Participants or Other Persons
If a legal action begun against the Committee (or any member or former member thereof), an Employer, or any person or persons to whom an Employer or the Committee has delegated all or part of its duties hereunder, by or on behalf of any person results adversely to that person, or if a legal action arises because of conflicting claims to a Participants or other persons benefits, the cost to the Committee (or any member or former member thereof), the Employers or any person or persons to whom the Employer or the Committee has delegated all or part of its duties hereunder of defending the action shall be charged to the extent permitted by law to the sums, if any, which were involved in the action or were payable to the Participant or other person concerned.
10.4 Evidence
Evidence required of anyone under the Plan may be by certificate, affidavit, document, or other information which the person acting on it considers pertinent and reliable, and signed, made, or presented by the proper party or parties.
10.5 Waiver of Notice
Any notice required under the Plan may be waived by the person entitled to such notice.
10.6 Controlling Law
Except to the extent superseded by laws of the United States, the laws of the State of California shall be controlling in all matters relating to the Plan.
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10.7 Statutory References
Any reference in the Plan to a Code section or a section of ERISA, or to a section of any other Federal law, shall include any comparable section or sections of any future legislation that amends, supplements, or supersedes that section.
10.8 Severability
In case any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if such illegal and invalid provision had never been set forth in the Plan.
10.9 Action By the Company, the Employers or the Committee
Any action required or permitted to be taken by the Company or any of the Employers under the Plan shall be by resolution of its board of directors, by resolution or other action of a duly authorized committee of its board of directors, or by action of a person or persons authorized by resolution of its board of directors or such committee. Any action required or permitted to be taken by the Committee under the Plan shall be by resolution or other action of the Committee or by a person or persons duly authorized by the Committee.
10.10 Headings and Captions
The headings and captions contained in this Plan are inserted only as a matter of convenience and for reference, and in no way define, limit, enlarge, or describe the scope or intent of the Plan, nor in any way shall affect the construction of any provision of the Plan.
10.11 Gender and Number
Where the context permits, words in the masculine gender shall include the feminine and neuter genders, the singular shall include the plural, and the plural shall include the singular.
10.12 Examination of Documents
Copies of the Plan and any amendments thereto are on file at the office of the Company where they may be examined by any Participant or other person entitled to benefits under the Plan during normal business hours.
10.13 Elections
Each election or request required or permitted to be made by a Participant (or a Participants Spouse or Beneficiary) shall be made in accordance with the rules and procedures established by the Committee and shall be effective as determined by the Committee. The Committees rules and procedures may address, among other things, the method and timing of any elections or requests required or permitted to be made by a Participant (or a Participants Spouse or Beneficiary).
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10.14 Manner of Delivery
Each notice or statement provided to a Participant shall be delivered in any manner established by the Committee and in accordance with applicable law, including, but not limited to, electronic delivery.
10.15 Facility of Payment
When a person entitled to benefits under the Plan is a minor, under legal disability, or, in the Committees opinion, is in any way incapacitated so as to be unable to manage his financial affairs, the Committee may cause the benefits to be paid to such persons guardian or legal representative. If no guardian or legal representative has been appointed, or if the Committee so determines in its sole discretion, payment may be made to any person as custodian for such individual under the California Uniform Transfers to Minors Act or other applicable state law, or to the legal representative of such person for such persons benefit, or the Committee may direct the application of such benefits for the benefit of such person. Any payment made in accordance with the preceding sentence shall be a full and complete discharge of any liability for such payment under the Plan.
10.16 Missing Persons
The Employers and the Committee shall not be required to search for or locate a Participant, Spouse, or Beneficiary. Each Participant, Spouse, and Beneficiary must file with the Committee, from time to time, in writing the Participants, Spouses, or Beneficiarys post office address and each change of post office address. Any communication, statement, or notice addressed to a Participant, Spouse, or Beneficiary at the last post office address filed with the Committee, or if no address is filed with the Committee, then in the case of a Participant, at the Participants last post office address as shown on the Employers records, shall be considered a notification for purposes of the Plan and shall be binding on the Participant and the Participants Spouse and Beneficiary for all purposes of the Plan.
If the Committee is unable to locate the Participant, Spouse, or Beneficiary to whom a Participants Accounts are payable, the Participants Accounts shall be frozen as of the date on which distribution would have been completed under the terms of the Plan, and no further notional investment returns shall be credited thereto.
If a Participant whose Accounts were frozen (or his Beneficiary) files a claim for distribution of the Accounts within 7 years after the date the Accounts are frozen, and if the Committee determines that such claim is valid, then the frozen balance shall be paid by the Company to the Participant or Beneficiary in a lump sum cash payment as soon as practicable thereafter. If the Committee notifies a Participant, Spouse, or Beneficiary of the provisions of this Subsection, and the Participant, Spouse, or Beneficiary fails to claim the Participants, Spouses, or Beneficiarys benefits or make such persons whereabouts known to the Committee within 7 years after the date the Accounts are frozen, the benefits of the Participant, Spouse, or Beneficiary may be disposed of, to the extent permitted by applicable law, by one or more of the following methods:
(a) | By retaining such benefits in the Plan. |
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(b) | By paying such benefits to a court of competent jurisdiction for judicial determination of the right thereto. |
(c) | By forfeiting such benefits in accordance with procedures established by the Committee. If a Participant, Spouse, or Beneficiary is subsequently located, such benefits shall be restored (without adjustment) to the Participant, Spouse, or Beneficiary under the Plan. |
(d) | By any equitable manner permitted by law under rules adopted by the Committee. |
10.17 Recovery of Benefits
In the event a Participant, Spouse, or Beneficiary receives a benefit payment from the Plan that is in excess of the benefit payment that should have been made to such Participant, Spouse, or Beneficiary, or in the event a person other than a Participant, Spouse, or Beneficiary receives an erroneous payment from the Plan, the Committee shall have the right, on behalf of the Plan, to recover the amount of the excess or erroneous payment from the recipient. To the extent permitted under applicable law, the Committee may, at its option, deduct the amount of such excess or erroneous payment from any future benefits payable to the applicable Participant, Spouse, or Beneficiary.
10.18 Effect on Other Benefits
Except as otherwise specifically provided under the terms of any other employee benefit plan of the Company, a Participants participation in this Plan shall not affect the benefits provided under such other employee benefit plan.
10.19 Tax and Legal Effects
The Employers, the Committee, and their representatives and delegatees do not in any way guarantee the tax treatment of benefits for any Participant, Spouse, or Beneficiary, and the Employers, the Committee, and their representatives and delegatees do not in any way guarantee or assume any responsibility or liability for the legal, tax, or other implications or effects of the Plan. In the event of any legal, tax, or other change that may affect the Plan, the Company may, in its sole discretion, take any actions it deems necessary or desirable as a result of such change.
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SECTION 11 THE COMMITTEE
11.1 Establishment of Committee
The Plan shall be administered by a Committee established by the Company, which as of the Effective Date shall be the Global Benefits Committee or any successor thereto.
11.2 Committee General Powers, Rights, and Duties
Except as otherwise specifically provided herein, and in addition to the powers, rights, and duties specifically given to the Committee elsewhere in the Plan or otherwise delegated to the Committee by the Company or the Compensation and Management Development Committee, the Committee shall have the following powers, rights, and duties, which shall be exercisable in the sole discretion of the Committee:
(a) | To adopt such rules, procedures, and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan and to change, alter, or amend such rules, procedures, and regulations; |
(b) | To construe and interpret the provisions of the Plan and make factual determinations thereunder; |
(c) | To determine all questions arising in the administration of the Plan, including the power to determine the rights or eligibility of Employees or Participants or any other persons, and the amounts of their benefits (if any) under the Plan, and to remedy ambiguities, inconsistencies, or omissions, and any such determination shall be binding on all parties; |
(d) | To employ and suitably compensate such agents, attorneys, accountants, actuaries, recordkeepers, or other persons (who also may be employed by the Company) to render advice and perform other services as the Committee may deem necessary to carry out its powers, rights, and duties; |
(e) | To the extent applicable, to direct payments or distributions in accordance with the provisions of the Plan; |
(f) | To furnish the Employers with such information as may be required by them for tax or other purposes in connection with the Plan; |
(g) | To communicate the Plan and its requirements to Participants; |
(h) | To take such actions as the Committee may deem necessary or advisable to correct any errors in the operation of the Plan; and |
(i) | To take such other actions as the Committee may deem necessary for the proper administration and operation of the Plan in accordance with its terms. |
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11.3 Interested Committee Member
No member of the Committee who is also an Employee of an Employer shall be excluded from participating in the Plan if otherwise eligible. If a member of the Committee (or one of its delegatees or designees) also is a Participant in the Plan, he may not decide or determine any matter or question concerning distributions of any kind to be made to him or her or the nature or mode of settlement of his benefits unless such decision or determination could be made by him or her under the Plan if he were not serving on the Committee.
11.4 Compensation and Expenses
Unless paid by an Employer, all reasonable costs, charges, and expenses incurred in the administration of this Plan, including expenses incurred by the Committee, compensation to an investment manager, and any compensation to agents, attorneys, actuaries, accountants, recordkeepers, and other persons performing services on behalf of this Plan or for the Committee, may be drawn from (a) Participants Accounts, in the form of a flat fee or a percentage of the value of each Account, (b) notional earnings or gains in each Investment Fund, or (c) an account maintained under a trust related to the Plan (if any).
11.5 Information Required by Committee
Each person entitled to benefits under the Plan must file with the Committee from time to time in writing such persons mailing address and each change of mailing address. Any communication, statement, or notice addressed to any person at the last mailing address filed with the Committee will be binding upon such person for all purposes of the Plan. Each person entitled to benefits under the Plan also shall furnish the Committee with such documents, evidence, data, or information as the Committee considers necessary or desirable for the purposes of administering the Plan. The Employers shall furnish the Committee with such data and information as the Committee may deem necessary or desirable in order to administer the Plan. The records of the Employers as to an Employees or Participants period of employment or membership on the Board, termination of employment or membership and the reason therefor, leave of absence, reemployment, and Compensation will be conclusive on all persons unless determined to the Committees satisfaction to be incorrect.
11.6 Uniform Application of Rules
The Committee shall administer the Plan on a reasonable basis. Any rules, procedures, or regulations established by the Committee shall be applied uniformly to all persons similarly situated.
11.7 Review of Benefit Determinations
Claims for benefits under the Plan shall be administered in accordance with Section 503 of ERISA, the regulations thereunder, and such reasonable claims procedures as may be established by the Committee. The Plan shall provide adequate notice to any Participant, Spouse, Beneficiary, or other claimant whose claim for benefits under the Plan has been denied,
- 23 -
setting forth the reasons for such denial, and shall afford such claimant a reasonable opportunity for a full and fair review. After exhaustion of the Plans claim procedures, any further legal action taken against the Plan or its fiduciaries by the Participant, Spouse, or Beneficiary (or other claimant) for benefits under the Plan must be filed in a court of law no later than 120 days after the Committees final decision regarding the claim. No action at law or in equity shall be brought to recover benefits under this Plan until the appeal rights herein provided have been exercised and the Plan benefits requested in such appeal have been denied in whole or in part. All decisions and communications to Participants, Spouses, Beneficiaries, or other persons regarding a claim for benefits under the Plan shall be held strictly confidential by the Participant, Spouse, or Beneficiary (or other claimant), and the Committee, the Employers, and their agents.
11.8 Committees Decision Final
Benefits under the Plan will be paid only if the Committee decides in its sole discretion that a Participant or Beneficiary (or other claimant) is entitled to them. Subject to applicable law, any interpretation of the provisions of the Plan and any decisions on any matter within the discretion of the Committee made by the Committee or its delegate in good faith shall be binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known and the Committee shall make such adjustment on account thereof as it considers equitable and practicable.
- 24 -
SECTION 12 AMENDMENT AND TERMINATION
While the Company expects and intends to continue the Plan, the Company and the Committee reserve the right to amend the Plan at any time and for any reason, including the right to amend this Section 12 and the Plan termination rules herein; provided, however, that each Participant will be entitled to the amount credited to his Accounts immediately prior to such amendment . The Companys power to amend the Plan includes (without limitation) the power to change the Plan provisions regarding eligibility, contributions, notional investments, vesting, and distribution forms, and timing of payments, including changes applicable to benefits accrued prior to the effective date of any such amendment; provided, however, that amendments to the Plan (other than amendments relating to Plan termination) shall not cause the Plan to provide for acceleration of distributions in violation of Section 409A of the Code and applicable regulations thereunder.
The Company and the Committee reserve the right to terminate the Plan at any time and for any reason; provided, however, that each Participant will be entitled to the amount credited to his Accounts immediately prior to such termination (but such Accounts shall not be adjusted for future notional income, losses, expenses, appreciation and depreciation).
In the event that the Plan is terminated pursuant to this Section 12, the balances in affected Participants Accounts shall be distributed at the time and in the manner set forth in Section 9. Notwithstanding the foregoing, the Company and the Committee reserve the right to make all such distributions within the second twelve-month period commencing with the date of termination of the Plan; provided, however, that no such distribution will be made during the first twelve-month period following such date of Plan termination other than those that would otherwise be payable under Section 9 absent the termination of the Plan.
- 25 -
Exhibit 4.2
SUPPLEMENTAL DEFERRED COMPENSATION PLAN (SDCP)
DEFERRAL ELECTION FORM FOR NON-EMPLOYEE DIRECTORS
Gap Inc. Global Benefits Department: 901 Cherry Avenue, San Bruno, CA 94066, FAX: (650) 874-6331
Last Name First Name Middle initial
Mailing Address
City State Zip
Contact Number email
SSN Date of Birth
Complete Section 1, Section 2A or 2B, Section 3 and Section 4.
Section 1: Election to Defer Board Fees earned in 2006 i
I elect to defer % of my Board Fees earned in the four fiscal year quarters beginning after January 1, 2006 for service on the Gap Inc. Board. I understand that this election is irrevocable and cannot be changed.
Section 2: Deferral Payout Method ii
A. I elect to have my Board fee deferral paid to me following termination of my service on the Board in the following manner, with the understanding that such election is irrevocable and cannot be changed (choose one):
¨ | Lump sum | ¨ | 10-year installments | |||||||
¨ | 5-year installments | ¨ | 15-year installments |
-OR-
B. I elect to have my Board fee deferral paid to me in the following year (or in a lump sum upon termination if termination occurs prior to such year), with the understanding that such election is irrevocable and cannot be changed (choose one):
¨ |
2011 | ¨ | 2014 | ¨ | 2017 | ¨ | 2020 | ¨ | Other: | |||||||||
¨ |
2012 | ¨ | 2015 | ¨ | 2018 | ¨ | 2021 | |||||||||||
¨ |
2013 | ¨ | 2016 | ¨ | 2019 | ¨ | 2022 |
Section 3: Investment Election
Select your notional investment funds below in 1% increments. The total must equal 100%.
T. Rowe Price New Horizons Fund |
% | |||
RiverSource New Dimensions Fund (Class Y) |
% | |||
Hotchkis & Wiley Large Cap Value Fund (Class I) |
% | |||
Vanguard 500 Index Fund |
% | |||
American Balanced Fund (Class R-4) |
% | |||
PIMCO Total Return Fund (Administrative Class) |
% | |||
Gap Stock Fund iii |
% | |||
Fixed Rate Option (2006 rate is 5.27%) |
% | |||
TOTAL: |
% | (Must = 100%) |
Section 4: Authorization
My signature below indicates my agreement and understanding that any election I make on this form is subject to all the terms and conditions contained in the SDCP. I acknowledge that I have received and read a copy of the Summary Plan Description/prospectus, the Plan Highlights Brochure, the Investment Fund prospectuses, and all the information on this form.
Signature: Date:
i I understand that I can defer up to 100% of my Board Fees related to the fees paid for my service on the Gap Inc. Board of Directors. I understand that my election must be in whole percentages, and cannot be a specific dollar amount . I understand that I cannot stop or make changes to my deferral until the next annual enrollment period. I understand that this election is irrevocable and cannot be changed. I understand that I must make an active election with each annual enrollment period. I understand that my election will not automatically continue from year to year. I understand that Board Fee deferral payouts are fully taxable to me in the year I receive them. If I am enrolling in the middle of a year, I understand that I must make my election within 30 days of becoming eligible, and my election applies only to Board Fees earned after the effective date of my
election.
ii I understand that deferral balances and any earnings will be paid in a lump sum upon termination, resignation or removal from the Board before the age of 50 or if my total balance in the Supplemental Deferred Compensation Plan is less than $10,000 at the time of my termination, resignation or removal, regardless of the payment method that I have selected. In that event, payment will be made to me in a lump sum in the earlier of my selected year or upon termination of service.
iii I understand that my investment election into the notional Gap Stock Fund will take effect at the end of the calendar quarter following the date of my election. Until the investment in the Gap Stock Fund takes effect, amounts subject to that election will be invested in the RiverSource Cash Management Fund (Class Y).
Plan #2273
SUPPLEMENTAL DEFERRED COMPENSATION PLAN (SDCP)
BONUS DEFERRAL ELECTION FORM FOR EXECUTIVES
Bonus Payable in 2007
Gap Inc. Global Benefits Department: 901 Cherry Avenue, San Bruno, CA 94066, FAX: (650) 874-6331
Last Name First Name Middle initial
Mailing Address City/State Zip
SSN Phone Number email
Complete Section 1, Section 2A or 2B, Section 3 and Section 4.
Section 1: Election to Defer Focal, Executive/ Management Incentive Cash Award Plan Bonus i
I elect to defer % of my eligible bonus (payable in 2007). I understand that this election is irrevocable and cannot be changed.
Section 2: Deferral Payout Method ii
I elect to have my bonus deferral paid to me in the following manner, with the understanding that such election is irrevocable and cannot be changed (choose one):
A. Paid upon termination of employment, in the following method:
¨ | Lump sum | ¨ | 10-year installments | |||||||
¨ | 5-year installments | ¨ | 15-year installments |
-OR-
B. Paid while employed by Gap Inc. in the following year (or in a lump sum upon termination if termination occurs prior to such year):
¨ |
2011 | ¨ | 2014 | ¨ | 2017 | ¨ | 2020 | ¨ | Other: | |||||||||
¨ |
2012 | ¨ | 2015 | ¨ | 2018 | ¨ | 2021 | |||||||||||
¨ |
2013 | ¨ | 2016 | ¨ | 2019 | ¨ | 2022 |
Section 3: Investment Election
(Note: Do not complete this section if you are also making a salary deferral election. The bonus deferral will follow the same investment allocation as your salary deferral. )
Select your notional investment funds below in 1% increments. The total must equal 100%.
T. Rowe Price New Horizons Fund |
% | |||
RiverSource New Dimensions Fund (Class Y) |
% | |||
Hotchkis & Wiley Large Cap Value Fund (Class I) |
% | |||
Vanguard 500 Index Fund |
% | |||
American Balanced Fund (Class R-4) |
% | |||
PIMCO Total Return Fund (Administrative Class) |
% | |||
Gap Stock Fund iii |
% | |||
Fixed Rate Option (2006 rate is 5.27%) |
% | |||
TOTAL: |
% | (Must = 100%) |
Section 4: Authorization
My signature below indicates my agreement and understanding that any election I make on this form is subject to all the terms and conditions contained in the SDCP. I acknowledge that I have received and read a copy of the Summary Plan Description/prospectus, the Plan Highlights Brochure, the Investment Fund prospectuses, and all the information on this form.
Signature Date
i I understand that I can defer up to 90% of my eligible bonus. I understand that my election must be in whole percentages and cannot be a specific dollar amount. I understand that I must make an active election with each annual enrollment period. I understand that my election will not automatically continue from year to year. I understand that deferring a large percentage of my bonus may result in applicable taxes (generally FICA taxes) being withheld from future paychecks I understand that bonus deferral payouts are fully taxable to me in the year I receive them.
ii I understand that deferral balances and any earnings will be paid in a lump sum upon termination if I leave the company before the age of 50 or if my total balance in the Supplemental Deferred Compensation Plan is less than $10,000 at the time of my termination, regardless of the payment method that I have selected. In that event, payment will be made to me in a lump sum in the earlier of my selected year or upon termination of my employment. I understand that participants who are determined to be a Key Employee are subject to a 6-month wait period for any SDCP distribution that is payable upon termination of employment.
iii I understand that my investment election into the notional Gap Stock Fund will take effect at the end of the calendar quarter following the date of my election. Until the investment in the Gap Stock Fund takes effect, amounts subject to that election will be invested in the RiverSource Cash Management Fund (Class Y).
Plan #2273
SUPPLEMENTAL DEFERRED COMPENSATION PLAN (SDCP)
SALARY DEFERRAL ELECTION FORM FOR EXECUTIVES
Gap Inc. Global Benefits Department: 901 Cherry Avenue, San Bruno, CA 94066, FAX: (650) 874-6331
Last Name First Name Middle initial
Mailing Address City/State Zip
SSN Phone Number email
Complete Section 1, Section 2A or 2B, Section 3 and Section 4.
Section 1: Election to Defer base salary i
I elect to defer % of my base salary in 2006 (deferral election will be applied to base salary for the payroll period beginning on or after January 1, 2006 through the payroll period beginning by December 31, 2006). I understand that this election is irrevocable and cannot be changed .
Section 2: Deferral Payout Method ii
A. I elect to have my salary deferral and any applicable company match paid to me in the following manner upon termination of employment, with the understanding that such election is irrevocable and cannot be changed (choose one):
¨ | Lump sum | ¨ | 10-year installments | |||||||
¨ | 5-year installments | ¨ | 15-year installments |
-OR-
B. I elect to have my salary deferral paid while employed by Gap Inc. in the following year or in a lump sum upon termination if termination occurs prior to such year (any applicable company match will not be paid while employed, but will be paid as a lump sum upon termination), with the understanding that such election is irrevocable and cannot be changed (choose one):
¨ | 2011 | ¨ | 2014 | ¨ | 2017 | ¨ | 2020 | ¨ | Other: | |||||||||
¨ | 2012 | ¨ | 2015 | ¨ | 2018 | ¨ | 2021 | |||||||||||
¨ | 2013 | ¨ | 2016 | ¨ | 2019 | ¨ | 2022 |
Section 3: Investment Election
Select your notional investment funds below in 1% increments. The total must equal 100%.
T. Rowe Price New Horizons Fund |
% | |||
RiverSource New Dimensions Fund (Class Y) |
% | |||
Hotchkis & Wiley Large Cap Value Fund (Class I) |
% | |||
Vanguard 500 Index Fund |
% | |||
American Balanced Fund (Class R-4) |
% | |||
PIMCO Total Return Fund (Administrative Class) |
% | |||
Gap Stock Fund iii |
% | |||
Fixed Rate Option (2006 rate is 5.27%) |
% | |||
TOTAL: |
% | (Must = 100%) |
Section 4: Authorization
My signature below indicates my agreement and understanding that any election I make on this form is subject to all the terms and conditions contained in the SDCP. I acknowledge that I have received and read a copy of the Summary Plan Description/prospectus, the Plan Highlights Brochure, the Investment Fund prospectuses, and all the information on this form.
Signature: Date:
i I understand that I can defer up to 75% of my base salary. I understand that my election must be in whole percentages and cannot be a specific dollar amount . I understand that I cannot stop or make changes to my deferral until the next annual enrollment period. I understand that this election is irrevocable and cannot be changed. I understand that I must make an active election with each annual enrollment period. I understand that my election will not automatically continue from year to year. I understand that salary deferral payouts are fully taxable to me in the year I receive them. If I am enrolling in the middle of a year, I understand that I must make my election within 30 days of becoming eligible, and my election applies only to salary
earned after the effective date of my election.
ii I understand that deferral balances will be paid in a lump sum upon termination if I leave the company before the age of 50 or if my total balance in the Supplemental Deferred Compensation Plan is less than $10,000 at the time of my termination, regardless of the payment method that I have selected. In that event, payment will be made to me in a lump sum in the earlier of my selected year or upon termination. I understand that participants determined to be a Key Employee are subject to a 6-month wait period for any SDCP distribution upon termination of employment.
iii I understand that my investment election into the notional Gap Stock Fund will take effect at the end of the calendar quarter following the date of my election. Until the investment in the Gap Stock Fund takes effect, amounts subject to that election will be invested in the RiverSource Cash Management Fund (Class Y).
Plan #2273
SUPPLEMENTAL DEFERRED COMPENSATION PLAN (SDCP)
BONUS DEFERRAL ELECTION FORM FOR EXECUTIVES
Sign-On Bonus
Gap Inc. Global Benefits Department: 901 Cherry Avenue, San Bruno, CA 94066, FAX: (650) 874-6331
Complete Section 1, Section 2A or 2B, Section 3 and Section 4.
Last Name First Name Middle initial
Mailing Address City/State Zip
SSN Phone Number email
Section 1: Election to Defer Sign-On Bonus i
I elect to defer % of my eligible sign-on bonus. I understand that this election is irrevocable and cannot be changed .
Section 2: Deferral Payout Method ii
I elect to have my Sign-On bonus deferral paid to me in the following manner, with the understanding that such election is irrevocable and cannot be changed (choose one):
A. Paid upon termination of employment, in the following method:
¨ | Lump sum | ¨ | 10-year installments | |||||||
¨ | 5-year installments | ¨ | 15-year installments |
-OR-
B. Paid while employed by Gap Inc. in the following year (or in a lump sum upon termination if termination occurs prior to such year):
¨ | 2011 | ¨ | 2014 | ¨ | 2017 | ¨ | 2020 | ¨ | Other: | |||||||||
¨ | 2012 | ¨ | 2015 | ¨ | 2018 | ¨ | 2021 | |||||||||||
¨ | 2013 | ¨ | 2016 | ¨ | 2019 | ¨ | 2022 |
Section 3: Investment Election
Select your notional investment funds below in 1% increments. The total must equal 100%.
T. Rowe Price New Horizons Fund |
% | |||
RiverSource New Dimensions Fund (Class Y) |
% | |||
Hotchkis & Wiley Large Cap Value Fund (Class I) |
% | |||
Vanguard 500 Index Fund |
% | |||
American Balanced Fund (Class R-4) |
% | |||
PIMCO Total Return Fund (Administrative Class) |
% | |||
Gap Stock Fund |
% | |||
Fixed Rate Option (2006 rate is 5.27%) |
% | |||
TOTAL: |
% | (Must = 100%) |
Section 4: Authorization
My signature below indicates my agreement and understanding that any election I make on this form is subject to all the terms and conditions contained in the SDCP. I acknowledge that I have received and read a copy of the Summary Plan Description/prospectus, the Plan Highlights Brochure, the Investment Fund prospectuses and all the information on this form.
Signature Date
i I understand that I can defer up to 90% of my eligible bonus. I understand that my election must be in whole percentages and cannot be a specific dollar amount. I understand that the deferred sign-on bonus is subject to a 1-year vesting period. And, if I do not remain employed with the company or an affiliate for the entire one-year period, the deferral and any deemed interest will be forfeited. I understand that deferring a large percentage of my sign-on bonus may result in applicable taxes (generally FICA
taxes) being withheld from future paychecks. I understand that bonus deferral payouts are fully taxable to me in the year I receive them.
ii I understand that deferral balances will be paid in a lump sum upon termination if I leave the company before the age of 50 or if my total balance in the Supplemental Deferred Compensation Plan is less than $10,000 at the time of my termination, regardless of the payment method that I have selected. In that event, payment will be made to me in a lump sum in the earlier of my selected year or upon termination of employment. I understand that participants who are determined to be a Key Employee are subject to a 6-month wait period for any SDCP distribution upon termination of employment.
iii I understand that my investment election into the notional Gap Stock Fund will take effect at the end of the calendar quarter following the date of my election. Until the investment in the Gap Stock Fund takes effect, amounts subject to that election will be invested in the RiverSource Cash Management Fund (Class Y).
Plan #2273
EXHIBIT 5.1
November 22, 2005
The Gap, Inc.
Two Folsom Street
San Francisco, CA 94105
Re: | The GAP, Inc. Registration Statement on Form S-8 |
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with the proposed filing with the Securities and Exchange Commission expected to be made on or about November 28, 2005 under the Securities Act of 1933, as amended, of a Registration Statement on Form S-8 (the Registration Statement) for the purpose of registering $40,000,000 of deferred compensation obligations (the Deferred Compensation Obligations) of The Gap, Inc., a Delaware corporation (the Company). The Deferred Compensation Obligations represent unsecured obligations of the Company to pay deferred compensation in the future in accordance with the terms of the Gap Inc. Supplemental Deferred Compensation Plan (the Plan).
We have examined instruments, documents and records which we have deemed relevant and necessary for the purposes of the opinion expressed herein.
Based on the foregoing, we advise you that, in our opinion, when issued in accordance with the provisions of the Plan, the Deferred Compensation Obligations will be valid and binding obligations of the Company, enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors rights generally and by general equity principles (regardless of whether enforcement is sought in equity or at law).
We consent to the filing of this opinion as an exhibit to the Registration Statement and we consent to the use of our name wherever it appears in the Registration Statement and any amendment thereto.
Very truly yours,
/s/ McDermott Will & Emery LLP
McDermott Will & Emery LLP
EXHIBIT 15.1
Deloitte & Touche LLP |
50 Fremont Street |
San Francisco, CA 94105-2230 |
USA |
Tel: +1 415 783 4000 |
Fax: +1 415 783 4329 www.deloitte.com |
November 28, 2005
The Gap, Inc.
Two Folsom Street
San Francisco, CA 94105
We have made a review, in accordance with the standards of the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of The Gap, Inc. and subsidiaries for the three-month periods ended April 30, 2005 and May 1, 2004 and have issued our report dated June 2, 2005, and for the six-month periods ended July 30, 2005 and July 31, 2004, and have issued our report dated September 1, 2005. As indicated in such reports, 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 April 30, 2005 and July 30, 2005, are being incorporated by reference in this Registration Statement.
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
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our report relating to the financial statements of The Gap, Inc. (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the restatement discussed in Note B), and managements report on the effectiveness of internal control over financial reporting dated March 25, 2005, appearing in the Annual Report on Form 10-K of The Gap, Inc. for the year ended January 29, 2005.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
November 28, 2005
EXHIBIT 24.1
POWER OF ATTORNEY OF DIRECTORS
KNOW BY ALL PERSONS BY THESE PRESENTS:
Each of the undersigned hereby constitutes and appoints Paul S. Pressler and Lauri M. Shanahan, each of them with power to act alone, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign a Registration Statement on Form S-8 relating to $40,000,000 of deferred compensation obligations under the Gap Inc. Supplemental Deferred Compensation Plan, and any and all amendments of such Registration Statements, including post-effective amendments, and to file the same, together with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises hereof, as fully to all intents and purposes as he or she might do or could do in person, thereby ratifying and confirming all that said attorney-in-fact or his or her substitutes may lawfully do or cause to be done by virtue hereof.
/s/ HOWARD P. BEHAR |
Howard P. Behar |
/s/ ADRIAN D.P. BELLAMY |
Adrian D. P. Bellamy |
/s/ DOMENICO DE SOLE |
Domenico De Sole |
/s/ DONALD G. FISHER |
Donald G. Fisher |
/s/ DORIS F. FISHER |
Doris F. Fisher |
/s/ ROBERT J. FISHER |
Robert J. Fisher |
/s/ PENELOPE L. HUGHES |
Penelope L. Hughes |
/s/ BOB L. MARTIN |
Bob L. Martin |
/s/ JORGE P. MONTOYA |
Jorge P. Montoya |
/s/ PAUL S. PRESSLER |
Paul S. Pressler |
/s/ JAMES M. SCHNEIDER |
James M. Schneider |
/s/ MAYO A. SHATTUCK III |
Mayo A. Shattuck III |
Margaret C. Whitman |