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.
SECTION 1       

DEFINITIONS
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 
such section.

1.6       'Committee' shall mean the Global Benefits Committee of the 
Company's Board.

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 
Section 3.3.

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 
('ELCAPP').

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 
Section 5.

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.
SECTION 2       

PARTICIPATION

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.

SECTION 3       

DEFERRAL CONTRIBUTIONS

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 
discretion.

SECTION 4       

ACCOUNTING

4.1       Participants' Accounts.  At the direction of the Committee, 
there shall be established and maintained on the books of the Company for each 
Participant:

(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.

SECTION 5       

DISTRIBUTIONS

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 
deferral.

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 
are permitted.

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 
designations.

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 
thereafter.

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 
Plan.

SECTION 6       

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.

SECTION 7       

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 
Plan;

(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 
Participants.

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.

SECTION 8       

FUNDING

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.

SECTION 9       

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.  
SECTION 10       


GENERAL PROVISIONS

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 
faith.

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 
Employer.

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.

EXECUTION

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 ________________________________
              Title: