Executive Deferred Compensation Plan - The Gap Inc.
THE GAP, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(January 1, 1999 Restatement)
The Gap, Inc. (the 'Company'), having established The Gap, Inc.
Executive Deferred Compensation Plan, effective January 1, 1994, and The Gap,
Inc. Executive Capital Accumulation Plan, effective April 1, 1994, for the
benefit of a select group of management employees of the Company and its
participating Affiliates, in order to provide such employees with certain
deferred compensation benefits, hereby amends and restates the Plans into one
Plan effective as of January 1, 1999. The Plan is an unfunded deferred
compensation plan that is intended to qualify for the exemptions provided in
sections 201, 301, and 401 of ERISA.
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
1.1 'Affiliate' shall mean a corporation, trade or business
which is, together with the Company, a member of a controlled group of
corporations or an affiliated service group or under common control (within
the meaning of section 414(b), (c), or (m) of the Code).
1.2 'Beneficiary' shall mean the person or persons entitled to
receive the balance credited to a Participant's Account under the Plan upon
the death of the Participant, as provided in Section 5.5.
1.3 'Board' shall mean the Board of Directors of the Company, as
from time to time constituted.
1.4 'Bonus' shall mean an award of cash payable to an Employee
in April of any fiscal year other than an ELCAPP Bonus.
1.5 'Code' shall mean 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
1.6 'Committee' shall mean the Global Benefits Committee of the
1.7 'Company' shall mean The Gap, Inc.
1.8 'Company Contributions' shall mean the amounts credited to
Participants' Accounts under the Plan by the Company, in accordance with
1.9 'Deferral Contributions' shall mean the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections
made in accordance with Section 2.2. A Participant's Deferral Contributions
shall include his or her Bonus and ELCAPP Bonus Deferral Contributions and
Salary Deferral Contributions, as described in Section 3.1.
1.10 'ELCAPP Bonus' shall mean an award of cash payable to an
Employee pursuant to the Executive Long-Term Cash Award Performance Plan
1.11 'Eligible Employee' shall mean an Employee of an Employer
who is employed at the level of 'director' or higher and who has a Salary
greater than 150% of the Social Security taxable wage base. Eligible Employee
shall not include any Employee who is employed in a foreign country, unless he
or she has been temporarily transferred to employment with an Employer in a
foreign country and is a citizen or resident alien of the United States at the
time of the transfer. An Employee's eligibility for any Plan Year shall be
determined as of November 1 of the preceding Plan Year, based on the
Employee's position and salary and on the taxable wage base in effect on that
date; provided, however, that in the case of an Employee who first satisfies
the conditions for being an Eligible Employee on or before June 1 of any Plan
Year, eligibility shall be determined as of that June 1. If a Participant
ceases to be an Eligible Employee, no further Deferral Contributions shall be
made to the Plan on his or her behalf unless he or she is again determined to
be an Eligible Employee, but the balance credited to his or her Account shall
continue to be credited with earnings under the terms of the Plan, and shall
be distributed to him or her at the time and in the manner set forth in
1.12 'Employee' shall mean an individual who is employed by one
of the Employers as a common-law employee.
1.13 'Employer' shall mean the Company and each participating
Affiliates. At such times and under such conditions as the Board may direct,
one or more other Affiliates may become participating Affiliates or a
participating Affiliate may be withdrawn from the Plan.
1.14 'ERISA' shall mean 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.
1.15 'Participant' shall mean an Eligible Employee who has
become a Participant in the Plan pursuant to Section 2.1 and has not ceased to
be a Participant pursuant to Section 2.4.
1.16 'Participant's Account' or 'Account' shall mean as to any
Participant the separate account maintained on the books of the Company in
order to reflect his or her interest under the Plan.
1.16.1 'Bonus Deferral Account' shall be the subaccount
maintained to record the Bonus and ELCAPP Bonus Deferral Contributions made by
the Participant, and the earnings relating thereto. To the extent necessary
to reflect a Participant's distribution elections, a separate Bonus Deferral
Account may be maintained with respect to amounts credited to the
Participant's Bonus Deferral Account for any Plan Year.
1.16.2 'Salary Deferral Account' shall be the subaccount
maintained to record the Salary Deferral Contributions made by the
Participant, and the earnings relating thereto. To the extent necessary to
reflect a Participant's distribution elections, a separate Salary Deferral
Account may be maintained with respect to the amounts credited to the
Participant's Salary Deferral Account for any Plan Year.
1.16.3 'Company Contribution Deferral Account' shall be
the subaccount maintained to record any Company Contributions made by the
Company, and the earnings related thereto. To the extent necessary to reflect
a Participant's distribution elections, a separate Company Contribution
Deferral Account may be maintained with respect to amounts credited to the
Participant's Company Contribution Deferral Account for any Plan Year.
1.17 'Plan' shall mean The Gap, Inc. Executive Deferred
Compensation Plan, as set forth in this instrument and as hereafter amended
from time to time.
1.18 'Plan Year' shall mean the calendar year.
1.19 'Retirement' shall mean a Participant's termination of
employment with all Employers and all Affiliates at or after age 50.
1.20 'Salary' shall mean a Participant's basic yearly salary,
excluding bonuses and taxable and nontaxable fringe benefits; provided,
however, that Salary shall include Salary Deferral Contributions and all
amounts contributed by an Employer pursuant to a salary reduction agreement
which are not includable in the Employee's gross income under sections 125,
402(a)(8), or 402(b) of the Code.
1.21 'Termination Date' shall mean a Participant's termination
of employment with all Employers and Affiliates.
2.1 Participation. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.
2.2 Elections. An Eligible Employee may elect to become a
Participant (or to reinstate active participation) in this Plan by electing to
make Deferral Contributions under the Plan.
2.2.1 Salary Deferral Elections. An Eligible Employee may
elect to make Salary Deferral Contributions for any Plan Year no later than
December 31 of the preceding Plan Year. An election under this Section 2.2.1
to make Salary Deferral Contributions shall be effective for each succeeding
Plan Year, until changed by the Eligible Employee in accordance with such
procedures as the Committee (in its discretion) may specify from time to time.
2.2.2 Bonus and ELCAPP Bonus Deferral Elections. An
Eligible Employee may elect to make a Bonus Deferral Contribution with respect
to his or her Bonus (payable on April 1 of any Plan Year) no later than
June 30 of the preceding Plan Year.
In addition, an Eligible Employee may elect to make an ELCAPP
Bonus Deferral Contribution with respect to his or her ELCAPP Bonus (payable
as of April 1, immediately following the end of the Performance Cycle as
defined in ELCAPP) no later than June 30 of the second year of the applicable
Performance Cycle. For example:
Performance Cycle begins: February 4, 1996
Performance Cycle ends: January 30, 1999
Bonus payable: April 1, 1999
Bonus deferral election made by: June 30, 1997
An election to make Bonus and ELCAPP Bonus Deferral Contributions
shall be effective for each succeeding Plan Year, until changed by the
Eligible Employee in accordance with such procedures as the Committee (in its
discretion) may specify from time to time.
2.2.3 No Election Changes During Plan Year. A Participant
shall not be permitted to change or revoke his or her election for a Plan Year
after the beginning of such Plan Year, except that (a) to the limited extent
provided in Section 2.3, a Participant may change or revoke his or her
election, (b) if a Participant's job changes to a position which is ineligible
for the Plan, his or her deferrals under the Plan shall cease, and (c) if
permitted by the Committee, in its sole discretion, a Participant may revoke
his or her election for the remainder of the Plan Year.
2.2.4 Specific Timing and Method of Election.
Notwithstanding any contrary provision of this Section 2.2, the Committee, in
its sole discretion, shall determine the manner and deadlines for Participants
to make Compensation Deferral elections. The deadlines prescribed by the
Committee may be earlier than the deadlines specified in Sections 2.2.1 and
2.2.2, but shall not be later than the deadlines prescribed in such Sections.
2.3 Suspension of Participation. In the event that all or part of
the Participant's vested Account is paid to the Participant as an in-service
withdrawal pursuant to Section 5.7, the Committee, in its sole discretion, may
suspend the Participant's Deferral Contributions for a period of twelve months
following such payment. However, an election to make Deferral Contributions
under Section 2.2 shall be irrevocable as to amounts deferred as of the
effective date of any suspension in accordance with this Section 2.3.
2.4 Termination of Participation. An Eligible Employee who has
become a Participant shall remain a Participant until his or her entire vested
Account balance is distributed. However, an Eligible Employee who has become
a Participant may or may not be an active Participant making Deferral
Contributions for a particular Plan Year, depending upon whether he or she has
elected to make Deferral Contributions for such Plan Year.
3.1 Amount of Contributions. At the times and in the manner
prescribed in Section 2.2, each Eligible Employee may elect to defer up to (a)
75% of his or her Salary, and (b) 90% of his or her Bonus or ELCAPP Bonus for
a Plan Year and to have the amounts of such deferrals credited to his or her
Account under the Plan on the books of the Company. An Eligible Employee may
elect to defer an amount equal to any specific percentage (in whole percentage
increments) of the Participant's Compensation. Notwithstanding any contrary
provision of the Plan, the Committee may reduce a Participant's Deferral
Contributions to the extent necessary to satisfy applicable withholding tax
requirements and employee welfare plan contributions.
3.2 Crediting of Deferral Contributions. The amounts deferred
pursuant to Section 3.1 shall reduce the Participant's Compensation during the
Plan Year and shall be credited to the Participant's Account as a date no
later than fifteen business days after the date on which the amount (but for
the deferral) otherwise would have been paid to the Participant.
3.3 Company Contributions. From time to time, the Committee may
determine (in its sole discretion) that a Company Contribution shall be
credited to a Participant's Company Contribution Deferral Account, on such
terms and conditions as the Committee may specify in its sole discretion. The
Company Contribution (if any) made on behalf of a Participant shall be
credited to the Participant's Company Contribution Deferral Account as of the
date specified by the Committee. The exact dollar amount of a Company
Contribution credited to any Participant's Company Contribution Deferral
Account shall be determined by the Committee under such formulae as it shall
adopt from time to time.
3.4 Deemed Investment Returns and Deemed Interest on Accounts.
Although no assets will be segregated or otherwise set aside with respect to a
Participant's Account, the amount that is ultimately payable to the
Participant with respect to his or her Account shall be determined as if such
Account had been invested in accordance with the Participant's deemed
investment elections (provided that such elections must comply with the
procedures established by the Committee pursuant to this Section 3.4). The
Committee, in its sole discretion, shall adopt (and may modify from time to
time) such rules and procedures as it deems necessary or appropriate to
implement and/or restrict the deemed investment of the Participants' Accounts.
Such procedures generally shall provide that a Participant shall be entitled
to make deemed investment elections as to the deemed investment of his or her
Account, subject to any limitations determined by the Committee in its
discretion. Such procedures may differ among Participants or classes of
Participants, as determined by the Committee in its discretion.
Notwithstanding the foregoing, if any Company Contribution is credited to a
Participant's Company Contribution Deferral Account, such Contribution shall
be deemed to be invested as determined by the Committee in its sole
4.1 Participants' Accounts. At the direction of the Committee,
there shall be established and maintained on the books of the Company for each
(a) A Salary Deferral Account to which shall be credited all
Salary Deferral Contributions made by the Participant;
(b) A Bonus Deferral Account to which shall be credited all
Bonus and ELCAPP Bonus Deferral Contributions made by the Participant; and
(c) A Company Contribution Deferral Account to which shall
be credited all Company Contributions made by the Company (if any).
To the extent necessary to reflect a Participant's distribution elections, the
Committee may direct the establishment of a separate Salary Deferral Account,
Bonus Deferral Account and/or Company Contribution Deferral Account with
respect to amounts credited to a Participant's Account for any Plan Year.
Each Participant's Account shall also be credited at the end of each day that
the New York Stock Exchange is open for business with deemed earnings and
losses and/or deemed interest in accordance with Section 3.4.
4.2 Participants Remain Unsecured Creditors. No funds shall be
set aside or earmarked for a Participant's Account, which shall be a purely
bookkeeping device. Instead, all amounts credited to a Participant's Account
under the Plan shall continue for all purposes to be a part of the general
assets of the Employer. Each Participant's interest in the Plan shall make
him or her only a general, unsecured creditor of the Employer.
4.3 Accounting Methods. The accounting methods or formulae to be
used under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting of deemed returns, gains and losses
and any deemed interest 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.
4.4 Reports. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her interest
in the Plan, at least annually.
5.1 Salary Deferral Account. Distribution of a Participant's
Salary Deferral Account shall be made only after his or her Termination Date.
Except as provided in Section 5.4, such distribution shall be made in a lump
sum as soon as practicable following that Termination Date. For purposes of
such distribution, the value of the Participant's Salary Deferral Account
shall be determined as of the last business day preceding the date that such
distribution is made.
5.2 Bonus Deferral Account. Except as provided in Section 5.4, a
Participant's Bonus Deferral Account shall be distributed in a lump sum as
soon as practicable following his or her Termination Date, unless the
Participant has elected an earlier in-service distribution date or dates for
all or a portion of such Account.
5.2.1 In-Service Distribution Election. A Participant's
election of an in-service distribution date must be made at the time of his or
her Bonus or ELCAPP Deferral Contribution election for a Plan Year, shall
apply only to amounts deferred pursuant to that election and shall be
irrevocable. A participant may elect an in-service distribution date with
respect to a Bonus or ELCAPP Deferral Contribution to be in a year permitted
by the Committee, in its sole discretion, for an in-service distribution,
provided that an in-service distribution date may not be earlier than the Plan
Year following the year in which the bonus would have been paid absent the
5.2.2 In-Service Distribution Payments. Payments made
pursuant to an in-service distribution election shall be made on or before the
last working day of April of the Plan Year in which such payment was elected
to be made. For purposes of such payment the value of the Participant's Bonus
Deferral Account shall be determined as of the last business day preceding the
date that such distribution is made.
5.3 Company Contribution Deferral Account. Distribution of a
Participant's vested Company Contribution Deferral Account shall be made at
the same time and in the same manner as distribution of the Participant's
Salary Deferral Account.
5.4 Retirement Installment Distributions. A Participant may elect
to receive payments from his or her Salary Deferral Account and/or Bonus
Deferral Account that are made after his or her Retirement in annual
installments for 5, 10 or 15 years.
5.4.1 Installment Elections. A Participant's election of
installment distributions must be made at the time of his or her Salary and/or
Bonus Deferral Contribution election for a Plan Year and automatically shall
apply to amounts deferred with respect to each succeeding Plan Year, until
changed by the Participant in accordance with such procedures as the Committee
(in its discretion) may specify from time to time. No such election shall be
effective if the Participant's Termination Date occurs before he or she
attains age 50.
5.4.2 Installment Payments. The first installment payment
shall be made as soon as practicable following the Participant's Retirement
date and succeeding payments shall be made on or before the last working day
of April in each succeeding year. However, in no case shall a Participant
receive more than one installment payment in any calendar year. The amount to
be distributed in each installment payment shall be determined by dividing the
value of the Account as of the Valuation Date preceding the date of each
distribution by the number of installment payments remaining to be made. The
'Valuation Date' for any installment distribution shall be the last business
day immediately preceding the applicable distribution date.
5.5 Death Distributions. If a Participant dies before the entire
balance of his or her Account has been distributed, the remaining balance of
the Participant's Account shall be distributed to his or her Beneficiary in a
lump sum as soon as practicable.
5.6 Beneficiary Designations. Each Participant may designate, in
a signed writing delivered to the Committee on such form as it may prescribe,
one or more Beneficiaries to receive any distribution which may become payable
as the result of the Participant's death. Primary and secondary Beneficiaries
5.6.1 Changes. A Participant may designate different
Beneficiaries (or may revoke a prior Beneficiary designation) at any time by
delivering a new designation (or revocation of a prior designation) in like
manner. Any designation or revocation shall be effective only if it is
received by the Committee. However, when so received, the designation or
revocation shall be effective as of the date the notice is executed (whether
or not the Participant still is living), but without prejudice to the
Committee on account of any payment made before the change is recorded. The
last effective designation received by the Committee shall supersede all prior
5.6.2 Failed Designations. If a Participant dies without
having effectively designated a Beneficiary, or if no Beneficiary (primary or
secondary) survives the Participant, the Participant's Account shall be
payable to his or her surviving spouse, or, if the Participant is not survived
by his or her spouse, the Account shall be paid to his or her estate.
5.7 In-Service Withdrawals. The Committee, in its sole discretion
and notwithstanding any contrary provision of the Plan, may determine that all
or part of the Participant's vested Account shall be paid to him or her
immediately as an in-service withdrawal; provided, however, that an amount
equal to ten percent of the total amount of the in-service withdrawal shall be
withheld by the Company. Participants shall be limited to one in-service
withdrawal per Plan Year.
5.8 Payments to Incompetents. If any individual to whom a benefit
is payable under the Plan is a minor, or if the Committee determines that any
individual to whom a benefit is payable under the Plan is incompetent to
receive such payment or to give a valid release therefor, payment shall be
made to the guardian, committee or other representative of the estate of such
individual which has been duly appointed by a court of competent jurisdiction.
If no guardian, committee or other representative has been appointed, payment
may be made to any person as custodian for such individual under the
California Uniform Transfers to Minors Act or may be made to or applied to or
for the benefit of the minor or incompetent, the incompetent's spouse,
children or other dependents, the institution or persons maintaining the minor
or incompetent, or any of them, in such proportions as the Committee from time
to time shall determine; and the release of the person or institution
receiving the payment shall be a valid and complete discharge of any liability
of the Employers with respect to any benefit so paid.
5.9 Undistributable Accounts. Each Participant and (in the event
of death) his or her Beneficiary shall keep the Committee advised of his or
her current address. If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant's Account is payable under this Section 5,
the Participant's Account shall be frozen as of the date on which distribution
would have been completed in accordance with this Section 5, and no further
deemed investment returns shall be credited thereto. If a Participant whose
Account was frozen (or his or her Beneficiary) files a claim for distribution
of the Account within seven years after the date that it was frozen, and if
the Committee determines that such claim is valid, then the frozen balance
shall be paid by the Company in a lump sum cash payment as soon as practicable
5.10 Committee Discretion. Within the specific time periods
described in this Section 5, the Committee shall have sole discretion to
determine the specific timing of the payment of any Account balance under the
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 Deferral Contributions. Subject to Sections 6.2 (relating to
vesting in Company Contributions), 8.1 (relating to creditor status) and 9.2
(relating to amendment and/or termination of the Plan), a Participant's
interest in the balance credited to his or her Account at all times shall be
100% vested and nonforfeitable.
6.2 Vesting in Company Contributions. A Participant's interest in
his or her Company Contribution (if any) shall become 100% vested and
nonforfeitable on the date that is one year after the date such Company
Contribution was made, but only if the Participant remains an employee of the
Company or an Affiliate for such entire one year period. Upon the
Participant's Termination Date, the vested portion of his or her Company
Contribution Deferral Account shall be distributable to him or her in the
manner and at the time set forth in Section 5, and the unvested portion of
such Account shall be permanently forfeited.
ADMINISTRATION OF THE PLAN
7.1 Plan Administrator. The Company is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
On behalf of the Company, the Committee shall have the authority to control
and manage the operation and administration of the Plan. Any member of the
Committee may resign at any time by notice in writing mailed or delivered to
the Board, who may remove any member of the Committee at anytime and may fill
any vacancy that exists.
7.2 Actions by Committee. Each decision of a majority of the
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
7.3 Powers of Committee. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the
Plan and to control its operation in accordance with its terms, including, but
not by way of limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of
the provisions of the Plan and to determine any question arising under,
or in connection with, the administration, operation or validity of the
Plan or any amendment thereto;
(b) To determine any and all considerations affecting the
eligibility of any Employee to become a Participant or remain a
Participant in the Plan;
(c) To cause one or more separate Accounts to be maintained
for each Participant;
(d) To cause Deferral Contributions and Company
Contributions and deemed earnings or losses and/or deemed interest to be
credited to Participants' Accounts;
(e) To establish and revise an accounting method or formula
for the Plan, as provided in Section 4.3;
(f) To determine the manner and form in which any
distribution is to be made under the Plan;
(g) To determine the status and rights of Participants and
their spouses, Beneficiaries or estates;
(h) To employ such counsel, agents and advisers, and to
obtain such legal, clerical and other services, as it may deem necessary
or appropriate in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the
performance of its powers and duties and for the administration of the
(j) To arrange for annual distribution to each Participant
of a statement of benefits accrued under the Plan;
(k) To publish a claims and appeal procedure satisfying the
minimum standards of section 503 of ERISA pursuant to which individuals
or estates may claim Plan benefits and appeal denials of such claims;
(l) To delegate to any one or more of its members or to any
other person, severally or jointly, the authority to perform for and on
behalf of the Committee one or more of the functions of the Committee
under the Plan; and
(m) to decide all issues and questions regarding Account
balances, and the time, form, manner and amount of distributions to
7.4 Decisions of Committee. All actions, interpretations, and
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.
7.5 Administrative Expenses. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal
fees and expenses, shall be paid and borne by the Employers.
7.6 Eligibility to Participate. No member of the Committee who is
also an employee of an Employer shall be excluded from participating in the
Plan if otherwise eligible, but he or she shall not be entitled, as a member
of the Committee, to act or pass upon any matters pertaining specifically to
his or her own Account under the Plan.
7.7 Indemnification. Each of the Employers shall, and hereby
does, indemnify and hold harmless the members of the Committee, from and
against any and all losses, claims, damages or liabilities (including
attorneys' fees and amounts paid, with the approval of an authorized officer
of the Company, in settlement of any claim) arising out of or resulting from
the implementation of a duty, act or decision with respect to the Plan, so
long as such duty, act or decision does not involve gross negligence or
willful misconduct on the part of any such individual.
8.1 Unfunded Plan. All amounts credited to a Participant's
Account under the Plan shall continue for all purposes to be a part of the
general assets of the Company. The interest of the Participant in his or her
Account, including his or her right to distribution thereof, shall be an
unsecured claim against the general assets of the Company. Although the
Company may choose to invest a portion of its general assets for purposes of
enabling it to make payments under the Plan, nothing contained in the Plan
shall give any Participant or beneficiary any interest in or claim against any
specific assets of the Company.
MODIFICATION OR TERMINATION OF PLAN
9.1 Employers' Obligations Limited. The Plan is voluntary on the
part of the Employers, and the Employers do not guarantee to continue the
Plan. The Company at any time may, by amendment of the Plan, suspend Deferral
Contributions or Company Contributions or may discontinue Deferral
Contributions or Company Contributions, with or without cause. Complete
discontinuance of all Deferral Contributions or Company Contributions shall be
deemed a termination of the Plan.
9.2 Right to Amend or Terminate. The Board reserves the right to
alter, amend or terminate the Plan, or any part thereof, in such manner as it
may determine, for any reason whatsoever. Any alteration, amendment or
termination shall take effect upon the date indicated in the document
embodying such alteration, amendment or termination, provided that no such
alteration or amendment shall divest any amount already credited to a
Participant's Account under the Plan. The Company may (but shall have no
obligation to) seek a private letter ruling from the Internal Revenue Service
regarding the tax consequences of participation in the Plan. If such private
letter ruling is sought, the Committee shall have the right to adopt such
amendments to the Plan (whether retroactive or prospective) that the Internal
Revenue Service may require as a condition to the issuance of such ruling.
9.3 Effect of Termination. If the Plan is terminated pursuant to
this Section 9, the balances credited to the Accounts of the affected
Participants shall be distributed to them at the time and in the manner set
forth in Section 5; provided, however, that the Committee, in its sole
discretion, may authorize accelerated distribution of Participants' Accounts
as of any earlier date.
10.1 Inalienability. In no event may either a Participant, a
former Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other
legal process. Accordingly, for example, a Participant's interest in the Plan
is not transferable pursuant to a domestic relations order.
10.2 Rights and Duties. Neither the Employers nor the Committee
shall be subject to any liability or duty under the Plan except as expressly
provided in the Plan, or for any action taken, omitted or suffered in good
10.3 No Enlargement of Employment Rights. Neither the
establishment or maintenance of the Plan, the making of any Deferral
Contributions or Company Contributions nor any action of any Employer or the
Committee, shall be held or construed to confer upon any individual any right
to be continued as an Employee nor, upon dismissal, any right or interest in
any specific assets of the Employers other than as provided in the Plan. Each
Employer expressly reserves the right to discharge any Employee at any time.
10.4 Apportionment of Costs and Duties. All acts required of the
Employers under the Plan may be performed by the Company for itself and its
Affiliates, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employer who is thereunto duly authorized by the board of directors of the
10.5 Applicable Law. The provisions of the Plan shall be
construed, administered and enforced in accordance with ERISA, and to the
extent not preempted by ERISA, with the laws of the State of California.
10.6 Severability. If any provision of the Plan is held invalid
or unenforceable, its invalidity or unenforceability shall not affect any
other provisions of the Plan, and in lieu of each provision which is held
invalid or unenforceable, there shall be added as part of the Plan a provision
that shall be as similar in terms to such invalid or unenforceable provision
as may be possible and be valid, legal, and enforceable.
10.7 Captions. The captions contained in and the table of
contents prefixed to the 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.
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
has executed this Plan on the date indicated below.
THE GAP, INC.
Dated: _______________, 1998 By ________________________________