900 Cherry Avenue
San Bruno, CA 94066
December 7, 2000
We are very pleased that you have agreed to work with Gap, Inc. on a consulting
basis, beginning on November 6, 2000. The following is a summary of the terms
of this engagement.
1. Consulting Services. You will provide consulting services to Gap, Inc. for
a minimum of ten days per month. During the consulting period you will
advise Mickey on operating decisions. Your primary contacts will be Anne
Gust, Heidi Kunz, and Chuck Crovitz. You will report to Mickey Drexler.
2. Compensation. Gap, Inc. will pay you $50,000 per month, payable every
month. You will also be granted the option to purchase 50,000 shares of
Gap, Inc. stock under the 1996 Stock Option and Award Plan ("Plan"), when
approved by the Compensation and Stock Option Committee of the Board of
Directors, and subject to the terms and conditions of a stock option
agreement under the Plan. The option price will be determined by the fair
market value of the stock on the date of grant. This option will vest six
months from the date of grant and expire ten years from the date of grant,
provided you remain a member of the Board of Directors of Gap, Inc. You
will receive no other compensation during the consulting period, including
vacation, health, retirement, stock, bonus or other benefits, other than
those described in this paragraph and other than those for which members of
Gap, Inc.'s Board of Directors are otherwise entitled. Gap, Inc. will not
withhold FICA (Social Security) contributions, or state or federal income
taxes from its payments to you. You agree that you will make such
contributions and pay such taxes as required by state and federal law and
to indemnify and defend Gap, Inc. in any legal action commenced for payment
of these items. Gap, Inc. will reimburse you for your reasonable expenses
incurred while providing these consulting services.
3. Termination. You or Gap, Inc. may terminate this agreement by providing 30
days advanced written notice, or immediately without notice by mutual
agreement. In any event, your services will end no later than May 2, 2001,
unless this agreement is extended in writing.
4. Confidentiality. You agree to maintain in strict confidence all
confidential information that you receive in the course of providing
consulting services or otherwise in connection with your relationship with
Gap, Inc. and you will use confidential information only for the specific
purposes of performing your obligations under this agreement, and to comply
in all respects with federal securities and other applicable laws with
respect to confidential information.
5. Assignment. No portion of this agreement or any of your rights, duties or
obligations under this agreement may be assigned or delegated by you to any
6. Complete agreement. This agreement constitutes the complete and exclusive
statement of the agreement between you and Gap, Inc. regarding your
consulting services to the company, and it supersedes all proposals, oral
or written, and all other communications between you and Gap, Inc.
regarding these services. Any modification of this agreement must be in
writing and signed by you and an authorized agent for Gap, Inc.
Again John, we are so pleased to have you working with us.
Please sign both copies of this agreement and send one back to me at your
/s/ Marka Hansen
Senior Vice President
/s/ John Lillie