{"id":40150,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/non-qualified-stock-option-agreement-gap.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"non-qualified-stock-option-agreement-gap","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/non-qualified-stock-option-agreement-gap.html","title":{"rendered":"Non-qualified Stock Option Agreement – Gap"},"content":{"rendered":"

Grant No. <\/strong><\/p>\n

THE GAP, INC. <\/strong><\/p>\n

NON-QUALIFIED STOCK OPTION AGREEMENT <\/strong><\/p>\n

The Gap, Inc. (the “Company”) hereby grants to <\/u><\/strong>
\n(the “Employee”), a stock option (“Option”) under The Gap, Inc. 2011 Long-Term
\nIncentive Plan (the “Plan”), to purchase shares of common stock of the Company,
\n$0.05 par value (“Shares”). This Option is subject to all of the terms and
\nconditions contained in this Non-Qualified Stock Option Agreement, including the
\nterms and conditions contained in the attached Appendix A and Appendix B
\n(collectively, the “Agreement”). The date of this Agreement is <\/u>. Subject
\nto the provisions of Appendix A and Appendix B of the Plan, the principal
\nfeatures of this Option are as follows:<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Number of Shares Purchasable with this Option:<\/strong>\n<\/td>\n<\/td>\n\n

<\/u><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
Price per Share:<\/strong><\/td>\n<\/td>\n\n

<\/u><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
Date of Grant:<\/strong><\/td>\n<\/td>\n\n

<\/u><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Date(s) Stock Option is Scheduled to become Exercisable: <\/strong>\n<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Vesting Date<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Number of Shares<\/strong><\/p>\n

Vesting on Vesting Date<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Latest Date<\/strong><\/p>\n

Option Expires<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

As provided in the Plan and in this Agreement, this Option may terminate
\nbefore the date written above, including before the Option becomes exercisable
\nor is exercised. For example, if Employee has a Termination of Service before
\nthe date this Option becomes exercisable, this Option will terminate at the same
\ntime as such termination. See paragraphs 5 and 6 of Appendix A for further
\ninformation concerning how changes in employment affect termination of this
\nOption. PLEASE BE SURE TO READ ALL OF APPENDIX A, APPENDIX B AND THE PLAN, WHICH
\nCONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS OPTION.<\/p>\n

IN WITNESS WHEREOF, the Company and the Employee have agreed to the terms of
\nthis Agreement, to be effective as of the date first above written.<\/p>\n<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

THE GAP, INC.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Dated:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

I understand that this Option is 1) subject to all of the terms and
\nconditions of this Agreement (including the attached Appendix A and Appendix B)
\nand of the Plan, 2) not considered salary, nor is it a promise for future grants
\nof Options, 3) not a term or condition of my employment with the Company (or one
\nof its Affiliates), and 4) made at the sole discretion of the Company.<\/p>\n<\/p>\n

1<\/p>\n

\n

APPENDIX A <\/strong><\/p>\n

TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION
\n<\/strong><\/p>\n

1. Grant of Option<\/u>. The Company hereby grants to Employee under the
\nPlan, as a separate incentive in connection with his or her employment and not
\nin lieu of any salary or other compensation for his or her services, a
\nnon-qualified stock Option to purchase, on the terms and conditions set forth in
\nthis Agreement and the Plan, all or any part of the number of Shares set forth
\non page 1 of this Agreement. The Option granted hereby is not intended to be an
\nIncentive Stock Option within the meaning of Section 422 of the Code.<\/p>\n

2. Exercise Price<\/u>. The purchase price per Share (the “Exercise Price”)
\nshall be equal to the price set forth on page 1 of this Agreement. The Exercise
\nPrice shall be payable in the legal tender of the United States.<\/p>\n

3. Number of Shares<\/u>. The Option is subject to adjustment in accordance
\nwith Section 4.3 of the Plan. Subject to any required action of the stockholders
\nof the Company, if the Company shall be the surviving corporation in any merger
\nor consolidation, the Option granted hereunder (to the extent that it is still
\noutstanding) shall pertain to and apply to the securities to which a holder of
\nthe same number of Shares that are then subject to the Option would have been
\nentitled. To the extent that the foregoing adjustments relate to stock or
\nsecurities of the Company, such adjustments shall be made by the Compensation
\nand Management Development Committee of the Company153s Board of Directors (the
\n“Committee”), whose determination in that respect shall be final, binding and
\nconclusive.<\/p>\n

4. Commencement of Exercisability<\/u>. Except as otherwise provided in
\nthis Agreement, the right to exercise the Option awarded by this Agreement shall
\naccrue as set forth on page 1 of this Agreement, assuming that Employee is still
\nemployed with, or providing consulting services to, the Company or an Affiliate
\nthrough such date(s). If Employee is not employed with, or providing consulting
\nservices to, the Company or an Affiliate on such date(s), the Option shall
\nterminate, as set out in paragraph 6.<\/p>\n

5. Postponement of Exercisability<\/u>. Notwithstanding paragraph 4 or any
\nother provision of this Agreement, prior to the date this Option is scheduled to
\nbecome exercisable, the Committee, in its sole discretion, may determine that
\nthe right to exercise the Option awarded by this Agreement shall accrue on a
\ndate later than such date. The Committee shall exercise its power to postpone
\nthe commencement of exercisability only if the Committee, in its sole
\ndiscretion, determines that Employee has taken a personal leave of absence (as
\ndetermined from time to time by the Committee and in accordance with applicable
\nlaw) since the date of this Agreement and such postponement is in compliance
\nwith applicable local laws. The duration of the period of postponement shall
\nequal the duration of the personal leave of absence (or shorter period if
\nnecessary to comply with applicable local laws). If Employee does not return
\nfrom the personal leave of absence, the Option shall terminate as set out in
\nparagraph 6 as of the date the Employee is scheduled to return from personal
\nleave of absence.<\/p>\n

6. Termination of Option<\/u>. In the event that Employee has a Termination
\nof Service for any reason other than Retirement (as defined below) or death,
\nthis Option shall immediately thereupon terminate, except that Employee shall
\nhave three (3) months from such termination to exercise any unexercised portion
\nof the Option which is then exercisable (or, if earlier, until the date that is
\nten (10) years from the date of this Agreement). In the event of Employee153s
\nRetirement, Employee may, within one (1) year after the date of such Retirement,
\nor within ten (10) years from the date of this Agreement, whichever shall first
\noccur, exercise any unexercised portion of the Option (whether or not
\nexercisable). In the event that Employee shall die while in the employ of the
\nCompany or an Affiliate, any unexercised portion of the Option (whether or not
\nexercisable) may be exercised by Employee153s beneficiary or transferee, as
\nhereinafter provided, for a period of one (1) year after the date of Employee153s
\ndeath or within ten (10) years from the date of this Agreement, whichever shall
\nfirst occur. Notwithstanding the preceding two sentences, in the event that
\nwithin one year of the date of this Agreement, Employee dies or has a
\nTermination of Service due to Retirement, this Option shall immediately
\nthereupon terminate. For purposes of this Agreement, “Retirement” shall mean
\nEmployee153s Termination of Service for any reason (other than due to Employee153s
\nmisconduct as determined by the Company in its sole discretion) after Employee
\nhas attained age 60 and completed at least five (5) years of continuous service
\nas an Employee of the Company or an Affiliate.<\/p>\n

For purposes of this Agreement, Termination of Service shall have the meaning
\nset forth in the Plan and be determined by reference to Employee153s active
\nservice without reference to any other agreement, written or oral, including
\nEmployee153s contract of employment (if any). Thus, in the event of Employee153s
\nTermination of Service (whether or not in breach of local labor laws), unless
\notherwise expressly provided for under this Agreement, Employee153s right to vest
\nin and exercise the Option, if any, will terminate effective on Employee153s
\nTermination of Service and will not be extended by any notice period mandated
\nunder local law (e.g.<\/em>, active employment would not include a period of
\n“garden leave” or similar period pursuant to local law); the<\/p>\n<\/p>\n

2<\/p>\n

\n

Committee shall have the exclusive discretion to determine when the Employee
\nhas incurred a Termination of Service.<\/p>\n

7. Persons Eligible to Exercise<\/u>. The Option shall be exercisable
\nduring Employee153s lifetime only by Employee. The Option shall be
\nnon-transferable by Employee other than by a beneficiary designation made in a
\nform and manner acceptable to the Committee (and provided the Committee allows
\nfor beneficiary designations), or by will or the applicable laws of descent and
\ndistribution.<\/p>\n

8. Death of Employee<\/u>. To the extent exercisable after Employee153s
\ndeath, the Option shall be exercised only by Employee153s designated beneficiary
\nor beneficiaries, or if no beneficiary survives Employee or no beneficiary is
\ndesignated, by the person or persons entitled to the Option under Employee153s
\nwill or in accordance with applicable local law, or if Employee shall fail to
\nmake testamentary disposition of the Option, his or her legal representative.
\nAny transferee exercising the Option must furnish the Company (a) written notice
\nof his or her status as transferee, (b) evidence satisfactory to the Company to
\nestablish the validity of the transfer of the Option and compliance with any
\nlaws or regulations pertaining to said transfer, and (c) written acceptance of
\nthe terms and conditions of the Option as prescribed in this Agreement.<\/p>\n

9. Exercise of Option<\/u>. The Option may be exercised by the person then
\nentitled to do so as to any Shares which may then be purchased (a) by giving
\nwritten notice of exercise to the Company, specifying the number of full Shares
\nto be purchased and accompanied by full payment of the purchase price thereof
\n(and the amount of any income tax, social insurance, payroll tax, or other
\ntax-related items related to Employee153s participation in the Plan and legally
\npayable by the Employee (“Tax-Related Items”)), and (b) by giving satisfactory
\nassurances in writing if requested by the Company, signed by the person
\nexercising the Option, that the Shares to be purchased upon such exercise are
\nbeing purchased for investment and not with a view to the distribution thereof.
\nThe Company reserves the right to restrict the methods of payment of the
\nExercise Price if necessary to comply with local law, as determined by the
\nCompany in its sole discretion.<\/p>\n

10. Tax Withholding and Payment Obligations<\/u>. Regardless of any action
\nthe Company or Employee153s employer (the “Employer”) takes with respect to any or
\nall Tax-Related Items, Employee acknowledges and agrees that the ultimate
\nliability for all Tax-Related Items legally due by Employee is and remains
\nEmployee153s responsibility and may exceed the amount actually withheld by the
\nCompany or the Employer. Employee further acknowledges that the Company and\/or
\nthe Employer (a) makes no representations or undertakings regarding the
\ntreatment of any Tax-Related Items in connection with any aspect of the Option,
\nincluding the grant, vesting, or exercise of the Option, the subsequent sale of
\nShares acquired under the Plan and the receipt of dividends, if any; and (b)
\ndoes not commit to and is under no obligation to structure the terms of the
\nOption or any aspect of the Option to reduce or eliminate Employee153s liability
\nfor Tax-Related Items, or achieve any particular tax result. Further, if
\nEmployee has become subject to tax in more than one jurisdiction between the
\ndate of grant and the date of any relevant taxable event, Employee acknowledges
\nthat the Company and\/or the Employer (or former employer, as applicable) may be
\nrequired to withhold or account for Tax-Related Items in more than one
\njurisdiction.<\/p>\n

No payment will be made to Employee (or his or her estate or beneficiary) for
\nan Option unless and until satisfactory arrangements (as determined by the
\nCompany) have been made by Employee with respect to the payment of any
\nTax-Related Items obligations of the Company and\/or the Employer with respect to
\nthe Option. In this regard, Employee authorizes the Company and\/or the Employer,
\nor their respective agents, at their discretion, to satisfy the obligations with
\nregard to all Tax-Related Items by one or a combination of the following:<\/p>\n

(a) withholding from Employee153s wages or other cash compensation paid to
\nEmployee by the Company or the Employer; or<\/p>\n

(b) withholding from proceeds of the sale of Shares acquired upon exercise of
\nthe Option, either through a voluntary sale or through a mandatory sale arranged
\nby the Company (on Employee153s behalf pursuant to this authorization); or<\/p>\n

(c) withholding in Shares to be issued upon exercise of the Option; or<\/p>\n

(d) surrendering already-owned Shares having a Fair Market Value equal to the
\nTax-Related Items that have been held for such period of time to avoid adverse
\naccounting consequences.<\/p>\n

If the obligation for Tax-Related Items is satisfied by withholding Shares,
\nfor tax purposes, the Employee is deemed to have been issued the full number of
\nShares purchased, notwithstanding that a number of the Shares is held back
\nsolely for the purpose of paying the Tax-Related Items due as a result of the
\nEmployee153s participation in the Plan. Employee shall pay to the Company or
\nEmployer any amount of Tax-Related Items that the Company<\/p>\n<\/p>\n

3<\/p>\n

\n

may be required to withhold as a result of Employee153s participation in the
\nPlan that cannot be satisfied by one or more of the means previously described
\nin this paragraph 10. Employee acknowledges and agrees that the Company may
\nrefuse to honor the exercise and refuse to issue or deliver the Shares or the
\nproceeds of the sale of Shares if Employee fails to comply with his or her
\nobligations in connection with the Tax-Related Items.<\/p>\n

11. Nature of Grant<\/u>. In accepting the Option, Employee acknowledges
\nthat:<\/p>\n

(a) the Plan is established voluntarily by the Company, it is discretionary
\nin nature and it may be modified, amended, suspended or terminated by the
\nCompany at any time;<\/p>\n

(b) the grant of the Option is voluntary and occasional and does not create
\nany contractual or other right to receive future grants of Options, or benefits
\nin lieu of Options even if Options have been granted repeatedly in the past;\n<\/p>\n

(c) all decisions with respect to future awards of Options, if any, will be
\nat the sole discretion of the Company;<\/p>\n

(d) Employee153s participation in the Plan is voluntary;<\/p>\n

(e) the Option and the Shares subject to the Option are extraordinary items
\nthat do not constitute regular compensation for services rendered to the Company
\nor the Employer, and that are outside the scope of Employee153s employment
\ncontract, if any;<\/p>\n

(f) the Option and the Shares subject to the Option are not intended to
\nreplace any pension rights or compensation;<\/p>\n

(g) the Option and the Shares subject to the Option are not part of normal or
\nexpected compensation or salary for any purposes, including, but not limited to,
\ncalculating any severance, resignation, termination, redundancy, dismissal, or
\nend of service payments, bonuses, long-service awards, pension or retirement or
\nwelfare benefits or similar payments and in no event should be considered as
\ncompensation for, or relating in any way to, past services for the Company or
\nthe Employer;<\/p>\n

(h) the future value of the underlying Shares is unknown and cannot be
\npredicted with certainty; further, if Employee exercises the Option and obtains
\nShares, the value of the Shares acquired upon exercise may increase or decrease
\nin value, even below the Exercise Price;<\/p>\n

(i) Employee also understands that neither the Company, nor any Affiliate is
\nresponsible for any foreign exchange fluctuation between local currency and the
\nUnited States Dollar that may affect the value of the Option;<\/p>\n

(j) in consideration of the grant of the Option, no claim or entitlement to
\ncompensation or damages shall arise from forfeiture of the Option resulting from
\ntermination of employment by the Employer (for any reason whatsoever and whether
\nor not in breach of local labor laws), and Employee irrevocably releases the
\nEmployer from any such claim that may arise; if, notwithstanding the foregoing,
\nany such claim is found by a court of competent jurisdiction to have arisen,
\nEmployee shall be deemed irrevocably to have waived his or her entitlement to
\npursue such claim; and<\/p>\n

(k) the Option and the benefits under the Plan, if any, will not
\nautomatically transfer to another company in the case of a merger, take-over or
\ntransfer of liability.<\/p>\n

12. No Advice Regarding Grant<\/u>. The Company is not providing any tax,
\nlegal or financial advice, nor is the Company making any recommendations
\nregarding Employee153s participation in the Plan, or Employee153s acquisition or
\nsale of the underlying Shares. Employee is hereby advised to consult with his or
\nher own personal tax, legal and financial advisors regarding Employee153s
\nparticipation in the Plan before taking any action related to the Plan.<\/p>\n

13. Data Privacy<\/u>. Employee hereby explicitly and
\nunambiguously consents to the collection, use and transfer, in electronic or
\nother form, of Employee153s personal data as described in this Agreement by and
\namong, as applicable, the Company and its Affiliates for the exclusive purpose
\nof implementing, administering and managing Employee153s participation in the
\nPlan. <\/em><\/strong><\/p>\n

Employee understands that the Company and its Affiliates may hold
\ncertain personal information about Employee, including, but not limited to,
\nEmployee153s name, home address and<\/em><\/strong><\/p>\n<\/p>\n

4<\/p>\n

\n

telephone number, date of birth, social insurance number or other
\nidentification number, salary, nationality, job title, any shares of stock or
\ndirectorships held in the Company or any Affiliate, details of all Options or
\nany other entitlement to shares of stock awarded, canceled, exercised, vested,
\nunvested or outstanding in Employee153s favor, for the exclusive purpose of
\nimplementing, administering and managing the Plan (“Personal Data”). Employee
\nunderstands that Personal Data may be transferred to any third parties assisting
\nin the implementation, administration and management of the Plan, that these
\nrecipients may be located in the United States, Employee153s country, or
\nelsewhere, and that the recipient153s country may have different data privacy laws
\nand protections than Employee153s country. Employee understands that he or she may
\nrequest a list with the names and addresses of any potential recipients of the
\nPersonal Data by contacting Employee153s local human resources representative.
\nEmployee authorizes the recipients to receive, possess, use, retain and transfer
\nthe Personal Data, in electronic or other form, for the purposes of
\nimplementing, administering and managing Employee153s participation in the Plan,
\nincluding any requisite transfer of such Personal Data as may be required to a
\nbroker or other third party with whom Employee may elect to deposit any Shares
\nreceived upon exercise of the Option. Employee understands that Personal Data
\nwill be held only as long as is necessary to implement, administer and manage
\nEmployee153s participation in the Plan. Employee understands that he or she may,
\nat any time, view Personal Data, request additional information about the
\nstorage and processing of Personal Data, require any necessary amendments to
\nPersonal Data or refuse or withdraw the consents herein, without cost, by
\ncontacting in writing Employee153s local human resources representative. Employee
\nunderstands that refusal or withdrawal of consent may affect Employee153s ability
\nto participate in the Plan or to realize benefits from the Option. For more
\ninformation on the consequences of Employee153s refusal to consent or withdrawal
\nof consent, Employee understands that he or she may contact his or her local
\nhuman resources representative. <\/em><\/strong><\/p>\n

14. No Rights of Stockholder<\/u>. Neither Employee nor any person claiming
\nunder or through said Employee shall be or have any of the rights or privileges
\nof a stockholder of the Company in respect of any of the Shares issuable upon
\nthe exercise of the Option, unless and until certificates representing such
\nShares shall have been issued, recorded on the records of the Company or its
\ntransfer agents or registrars, and delivered to Employee.<\/p>\n

15. No Right to Continued Employment<\/u>. Employee understands and agrees
\nthat this Agreement does not impact in any way the right of the Employer to
\nterminate or change the terms of the employment of Employee at any time for any
\nreason whatsoever, with or without good cause provided in accordance with
\napplicable local law. Employee understands and agrees that unless contrary to
\napplicable local law or there is an employment contract in place providing
\notherwise, his or her employment is “at-will” and that either the Employer or
\nEmployee may terminate Employee153s employment at any time and for any reason
\nsubject to applicable local law. Employee also understands and agrees that his
\nor her “at-will” status (if applicable) can only be changed by an express
\nwritten contract signed by an authorized officer of the Company and Employee if
\nthe Employee153s employer is the Company.<\/p>\n

16. Addresses for Notices<\/u>. Any notice to be given to the Company under
\nthe terms of this Agreement shall be addressed to the Company, in care of its
\nLegal Department, at The Gap, Inc., 2 Folsom, 13th<\/sup> Floor, San
\nFrancisco, California 94105, or at such other address as the Company may
\nhereafter designate in writing. Any notice to be given to Employee shall be
\naddressed to Employee at the address set forth beneath Employee153s signature
\nhereto, or at such other address as Employee may hereafter designate in writing.
\nAny such notice shall be deemed to have been duly given if and when enclosed in
\na properly sealed envelope, addressed as aforesaid, registered or certified and
\ndeposited, postage and registry fee prepaid, in a United States post office or
\ngenerally recognized international courier such as DHL or Federal Express.<\/p>\n

17. Non-Transferability of Option<\/u>. Except as otherwise herein
\nprovided, the Option herein granted and the rights and privileges conferred
\nhereby shall not be transferred, assigned, pledged or hypothecated in any way
\n(whether by operation of law or otherwise) and shall not be subject to sale
\nunder execution, attachment or similar process. Upon any attempt to transfer,
\nassign, pledge, hypothecate or otherwise dispose of said Option, or of any right
\nor privilege conferred hereby, contrary to the provisions hereof, or upon any
\nattempted sale under any execution, attachment or similar process upon the
\nrights and privileges conferred hereby, said Option and the rights and
\nprivileges conferred hereby shall immediately become null and void.<\/p>\n

18. Maximum Term of Option<\/u>. Notwithstanding any other provision of
\nthis Agreement, this Option is not exercisable after the expiration of ten (10)
\nyears from the date of this Agreement.<\/p>\n

19. Binding Agreement<\/u>. Subject to the limitation on the
\ntransferability of the Option contained herein, this Agreement shall be binding
\nupon and inure to the benefit of the heirs, legatees, legal representatives,
\nsuccessors and assigns of the parties hereto.<\/p>\n<\/p>\n

5<\/p>\n

\n

20. Plan Governs<\/u>. This Agreement is subject to all terms and
\nprovisions of the Plan. In the event of a conflict between one or more
\nprovisions of this Agreement and one or more provisions of the Plan, the
\nprovisions of the Plan shall govern. Terms used and not defined in this
\nAgreement shall have the meaning set forth in the Plan.<\/p>\n

21. Committee Authority<\/u>. The Committee shall have the power to
\ninterpret the Plan and this Agreement and to adopt such rules for the
\nadministration, interpretation and application of the Plan as are consistent
\ntherewith and to interpret or revoke any such rules. All actions taken and all
\ninterpretations and determinations made by the Committee in good faith shall be
\nfinal and binding upon Employee, the Company and all other interested persons.
\nNo member of the Committee shall be personally liable for any action,
\ndetermination or interpretation made in good faith with respect to the Plan or
\nthis Agreement.<\/p>\n

22. Captions<\/u>. Captions provided herein are for convenience only and
\nare not to serve as a basis for interpretation or construction of this
\nAgreement.<\/p>\n

23. Modifications to this Agreement<\/u>. This Agreement constitutes the
\nentire understanding of the parties on the subjects covered. Employee expressly
\nwarrants that he or she is not accepting this Agreement in reliance on any
\npromises, representations, or inducements other than those contained herein.
\nModifications to this Agreement or the Plan can be made only in an express
\nwritten contract executed by a duly authorized officer of the Company.<\/p>\n

24. Agreement Severable<\/u>. In the event that any provision in this
\nAgreement shall be held invalid or unenforceable, such provision shall be
\nseverable from, and such invalidity or unenforceability shall not be construed
\nto have any effect on, the remaining provisions of this Agreement.<\/p>\n

25. Notice of Governing Law and Venue<\/u>. This Agreement shall be
\ngoverned by, and construed in accordance with, the laws of the State of
\nCalifornia without regard to principles of conflict of laws. For purposes of
\nlitigating any dispute that arises directly or indirectly from the relationship
\nof the parties evidenced by this grant or the Agreement, the parties hereby
\nsubmit to and consent to the exclusive jurisdiction of the State of California
\nand agree that such litigation shall be conducted only in the courts of San
\nFrancisco County, California, or the federal courts for the United States for
\nthe Northern District of California and no other courts, where this grant is
\nmade and\/or to be performed.<\/p>\n

26. Electronic Delivery<\/u>. The Company may, in its sole discretion,
\ndecide to deliver any documents related to current or future participation in
\nthe Plan by electronic means. Employee hereby consents to receive such documents
\nby electronic delivery and agrees to participate in the Plan through an on-line
\nor electronic system established and maintained by the Company or another third
\nparty designated by the Company.<\/p>\n

27. Language.<\/u> If Employee has received this Agreement, including
\nAppendices, or any other document related to the Plan translated into a language
\nother than English, and the meaning of the translated version is different than
\nthe English version, the English version will control.<\/p>\n

28. Appendix B<\/u>. Notwithstanding any provisions in this Agreement, the
\nOption grant shall be subject to any special terms and conditions set forth in
\nAppendix B to this Agreement for Employee153s country. Moreover, if Employee
\nrelocates to one of the countries included in Appendix B, the special terms and
\nconditions for such country will apply to Employee, to the extent the Company
\ndetermines that the application of such terms and conditions is necessary or
\nadvisable in order to comply with local law or facilitate the administration of
\nthe Plan. As stated above, Appendix B constitutes part of this Agreement.<\/p>\n

29. Imposition of Other Requirements<\/u>. The Company reserves the right
\nto impose other requirements on Employee153s participation in the Plan, on the
\nOption and on any Shares acquired under the Plan, to the extent the Company
\ndetermines it is necessary or advisable in order to comply with local law or
\nfacilitate the administration of the Plan, and to require Employee to sign any
\nadditional agreements or undertakings that may be necessary to accomplish the
\nforegoing.<\/p>\n

* * *<\/p>\n<\/p>\n

6<\/p>\n

\n

APPENDIX B <\/strong><\/p>\n

ADDITIONAL TERMS AND CONDITIONS OF THE GAP, INC.
\n<\/strong><\/p>\n

NON-QUALIFIED STOCK OPTION AGREEMENT <\/strong><\/p>\n

NON-U.S. EMPLOYEES <\/strong><\/p>\n

Terms and Conditions <\/em><\/strong><\/p>\n

This Appendix B includes special terms and conditions applicable to Employee
\nif Employee resides in one of the countries listed below. These terms and
\nconditions are in addition to or, if so indicated, in place of, the terms and
\nconditions set forth in the Agreement. Unless otherwise provided below,
\ncapitalized terms used but not defined herein shall have the same meanings
\nassigned to them in the Plan and the Agreement.<\/p>\n

Notifications <\/em><\/strong><\/p>\n

This Appendix also includes country-specific information of which Employee
\nshould be aware with respect to his or her participation in the Plan. The
\ninformation is based on the securities, exchange control and other laws in
\neffect in the respective countries as of May 2011. Such laws are often complex
\nand change frequently. As a result, the Company strongly recommends that
\nEmployee does not rely on the information noted herein as the only source of
\ninformation relating to the consequences of Employee153s participation in the Plan
\nbecause the information may be out of date at the time that Employee exercises
\nthe Option or sell Shares acquired under the Plan.<\/p>\n

In addition, the information is general in nature and may not apply to
\nEmployee153s particular situation, and the Company is not in a position to assure
\nEmployee of any particular result. Accordingly, Employee is advised to seek
\nappropriate professional advice as to how the relevant laws in his or her
\ncountry may apply to his or her situation. Finally, please note that if Employee
\nis a citizen or resident of a country other than the country in which he or she
\nis currently working, or transfers employment after grant, the information
\ncontained in this Appendix may not be applicable to Employee.<\/p>\n

CANADA <\/u><\/strong><\/p>\n

Form of Payment<\/strong>. Notwithstanding anything to the contrary in
\nthe Plan or the Agreement, the Employee is prohibited from surrendering Shares
\nthat he or she already owns or attesting to the ownership of Shares to pay the
\nExercise Price or any Tax-Related Items in connection with the Option.<\/p>\n

The following provisions will apply to Employees who are residents of
\nQuebec: <\/strong><\/p>\n

Language Consent. <\/strong>The parties acknowledge that it is their
\nexpress wish that this Agreement, as well as all documents, notices and legal
\nproceedings entered into, given or instituted pursuant hereto or relating
\ndirectly or indirectly hereto, be drawn up in English.<\/p>\n

Les parties reconnaissent avoir exig la redaction en anglais de cette
\nconvention<\/em> (“Agreement”), ainsi que de tous documents ex cut s, avis
\ndonn s et procedures judiciaries intent es, directement ou indirectement,
\nrelativement la pr sente convention. <\/em><\/p>\n

Authorization to Release and Transfer Necessary Personal Information.
\n<\/strong>This provision supplements paragraph 13 of Appendix A of the Agreement:\n<\/p>\n

Employee hereby authorizes the Company and the Company153s representatives to
\ndiscuss with and obtain all relevant information from all personnel,
\nprofessional or not, involved in the administration and operation of the Plan.
\nEmployee further authorizes the Company and its Affiliates and the Committee,
\nwhich administers the Plan, to disclose and discuss the Plan with their
\nadvisors. Employee further authorizes the Company and any Affiliate to record
\nsuch information and to keep such information in Employee153s employee file.<\/p>\n<\/p>\n

7<\/p>\n

\n

FRANCE <\/u><\/strong><\/p>\n

Taxation of Option.<\/strong> This Option is not intended to be French
\ntax-qualified.<\/p>\n

Language Consent.<\/strong> In accepting the grant of the Option and
\nthe Agreement which provides for the terms and conditions of the Option,
\nEmployee confirms that he or she has read and understood the documents relating
\nto the Option (the Plan and the Agreement), which were provided in the English
\nlanguage. Employee accepts the terms of these documents accordingly.<\/p>\n

Consentement Relatif la Langue Utilis e.<\/em><\/strong> En
\nacceptant cette attribution d153Options et ce contrat qui contient les termes et
\nconditions de cette attribution d153Options, l153employ confirme ainsi avoir lu et
\ncompris les documents relatifs cette attribution (le Plan et le Contrat
\nd153Attribution) qui lui ont t communiqu s en langue anglaise. , L153employ en
\naccepte les termes en connaissance de cause. <\/em><\/p>\n

Exchange Control Information. <\/strong>Employee may hold Shares
\nacquired under the Plan outside of France provided he or she declares all
\nforeign accounts, whether open, current, or closed, in his or her income tax
\nreturn. Furthermore, Employee must declare to the customs and excise authorities
\nany cash or bearer securities he or she imports or exports without the use of a
\nfinancial institution when the value of the cash or securities is equal to or
\nexceeds 10,000 (for 2011).<\/p>\n

HONG KONG <\/u><\/strong><\/p>\n

Securities Law Notice.<\/strong> The Option and Shares issued upon
\nexercise of the Option do not constitute a public offering of securities under
\nHong Kong law and are available only to Employees of the Company and its
\nAffiliates. The Agreement, including this Appendix B, the Plan and other
\nincidental communication materials have not been prepared in accordance with and
\nare not intended to constitute a “prospectus” for a public offering of
\nsecurities under the applicable securities legislation in Hong Kong. Nor have
\nthe documents been reviewed by any regulatory authority in Hong Kong. The Option
\nis intended only for the personal use of each eligible Employee of the Company
\nor its Affiliates and may not be distributed to any other person. If Employee is
\nin any doubt about any of the contents of the Agreement, including this
\nAppendix, or the Plan, Employee should obtain independent professional advice.\n<\/p>\n

Settlement of Option and Sale of Shares.<\/strong> In the event
\nEmployee153s Option vests and Shares are issued to Employee within six months of
\nthe date of grant, Employee agrees that he or she will not dispose of any of
\nsuch Shares prior to the six-month anniversary of the date of grant.<\/p>\n

INDIA <\/u><\/strong><\/p>\n

Form of Payment.<\/strong> Notwithstanding anything to the contrary in
\nthe Plan or the Agreement, due to legal restrictions in India, Employee will not
\nbe permitted to pay the Exercise Price by using a cashless sell-to-cover method
\nof exercise (under which method a number of Shares with a value sufficient to
\ncover the Exercise Price, brokerage fees and any applicable Tax-Related Items
\nwould be sold upon exercise and Employee would receive only the remaining Shares
\nsubject to the exercised Option). The Company reserves the right to allow
\nadditional forms of payment depending on the development of local law.<\/p>\n

Tax Information.<\/strong> The amount subject to tax at exercise may
\nbe dependent upon a valuation of Shares from a Merchant Banker in India. The
\nCompany has no responsibility or obligation to obtain the most favorable
\nvaluation possible nor obtain valuations more frequently than required under
\nIndian tax law.<\/p>\n

Exchange Control Obligations. <\/strong>Employee understands that he
\nor she must repatriate any proceeds from the sale of Shares acquired under the
\nPlan and any dividends received in relation to the Shares to India and convert
\nthe proceeds into local currency within ninety (90) days of receipt. Employee
\nwill receive a foreign inward remittance certificate (“FIRC”) from the bank
\nwhere he or she deposits the foreign currency. Employee should maintain the FIRC
\nas evidence of the repatriation of fund in the event the Reserve Bank of India
\nor the Employer requests proof of repatriation.<\/p>\n

INDONESIA <\/u><\/strong><\/p>\n

Form of Payment.<\/strong> Notwithstanding anything to the contrary in
\nthe Plan or the Agreement, due to local legal requirements, Employee will be
\nrequired to pay the Exercise Price through the delivery of irrevocable
\ninstructions to a Company-designated broker to immediately sell all of the
\nShares acquired upon exercise of the Option and to deliver promptly to the
\nCompany an amount out of the proceeds of such sale equal to the<\/p>\n<\/p>\n

8<\/p>\n

\n

aggregate Exercise Price for the Shares being purchased (and any Tax-Related
\nItems). The remaining proceeds of the sale of the Shares, less any Tax-Related
\nItems and broker153s fees or commissions, will be remitted to Employee. The
\nCompany reserves the right to allow additional forms of payment depending on the
\ndevelopment of local law.<\/p>\n

Exchange Control Information. <\/strong>If Employee remits proceeds
\nfrom the cashless exercise of the Option into Indonesia, the Indonesian Bank
\nthrough which the transaction is made will submit a report on the transaction to
\nthe Bank of Indonesia for statistical reporting purposes. For transactions of
\nUS$10,000 or more, a description of the transaction must be included in the
\nreport. Although the bank through which the transaction is made is required to
\nmake the report, Employee must complete a “Transfer Report Form.” The Transfer
\nReport Form should be provided to Employee by the bank through which the
\ntransaction is made.<\/p>\n

KOREA <\/u><\/strong><\/p>\n

Exchange Control Information. <\/strong>If Employee remits funds out
\nof Korea to pay the Exercise Price, his or her remittance must be “confirmed” by
\na foreign exchange bank in Korea. This is an automatic procedure,
\ni.e.<\/em>, the bank does not need to “approve” the remittance, and it should
\ntake no more than a single day to process. The following supporting documents
\nevidencing the nature of the remittance must be submitted to the bank together
\nwith the confirmation application: (i) Agreement; (ii) the Plan; (iii) a
\ndocument evidencing the type of Shares to be acquired and the amount; and (iv)
\nEmployee153s certificate of employment. This confirmation is not necessary for
\ncashless exercises since there is no remittance out of Korea.<\/p>\n

Additionally, exchange control laws require Korean residents who realize
\nUS$500,000 or more from the sale of Shares to repatriate the proceeds to Korea
\nwithin 18 months of the sale.<\/p>\n

PEOPLE153S REPUBLIC OF CHINA <\/u><\/strong><\/p>\n

Mandatory Cashless Exercise. <\/strong>By accepting the Option, the
\nEmployee acknowledges and agrees that the immediate sale of the Shares issued
\nupon the exercise of the Option is required unless the Company, in its sole
\ndiscretion, determines otherwise. Such Shares will be transferred to a brokerage
\nfirm designated by the Company (the “Brokerage Firm”). The Brokerage Firm, on
\nthe Employee153s behalf, may, upon the Employee153s delivery of a properly executed
\nwritten notice of exercise together with irrevocable instructions to the
\nBrokerage Firm, thereafter immediately sell the Shares at the prevailing market
\nprice pursuant to any process for the sale set forth by the Company, and deliver
\nthe proceeds, less the Exercise Price, Tax-Related Items and any broker fees, to
\nthe Company or its designee, which would then remit the net proceeds to the
\nEmployee through the Company153s or Affiliate153s special purpose bank account in
\nChina. As a result of the immediate sale of Shares as set forth in this Appendix
\nB, no Shares would be delivered to the Employee, and the Employee would not have
\nany resulting rights as a shareholder of the Company.<\/p>\n

Special Administration in China<\/strong>. The Employee153s ability to
\nexercise the Option shall be contingent upon the Company or its Affiliate
\nobtaining approval from the State Administration of Foreign Exchange (“SAFE”)
\nfor Employee153s participation in the Plan (to the extent required as determined
\nby the Company in its sole discretion) and the establishment of a SAFE-approved
\nbank account. Employee understands and agrees that he or she will be required to
\nimmediately repatriate the proceeds from the exercise\/ immediate sale of Shares
\nto China. Employee further understands that such repatriation of proceeds may
\nneed to be effected through a special foreign exchange account established by
\nthe Company or Affiliate and Employee hereby consents and agrees that the
\nproceeds from the exercise\/ immediate sale of Shares may be transferred to such
\nspecial account prior to being delivered to Employee153s personal account.
\nFurthermore, Employee understands that due to SAFE approval requirements, there
\nmay be delays in delivering the proceeds to Employee, Employee will bear any
\nexchange rate risk during the period between exercise and when the proceeds are
\ndelivered to him or her, Employee may be required to open up a U.S. dollar bank
\naccount to receive the proceeds and also Employee may be required to pay the
\nCompany or an Affiliate the taxes due on the exercise prior to receiving the
\nproceeds from exercise\/ immediate sale of Shares. Furthermore, the Company may
\nshorten the post-termination exercise periods if required by SAFE.<\/p>\n

Please note that these special administration procedures will not apply to
\nnon Chinese Nationals.<\/p>\n

The provisions above pursuant to which Employee agrees to sell all Shares
\nissued to him or her immediately when the Shares are issued to him or her upon
\nexercise at the then current market price is intended to be a plan pursuant to
\nRule 10b5-1 of the U.S. Securities Exchange Act of 1934 to the extent Employee
\nis subject to this Act. By signing the Agreement, Employee represents that he or
\nshe is not aware of any material non-public information about the Company at the
\ntime he or she is signing the Agreement.<\/p>\n<\/p>\n

9<\/p>\n

\n

SINGAPORE <\/u><\/strong><\/p>\n

Securities Law Notice<\/strong>. <\/em><\/strong>The grant
\nof the Option is made in reliance on section 273(1)(f) of the Securities and
\nFutures Act (Cap. 289) (“SFA”) for which it is exempt from the prospectus and
\nregistration requirements under the SFA.<\/p>\n

Director Notification Obligation.<\/strong> If Employee is a director,
\nassociate director or shadow director (i.e., a non-director who has sufficient
\ncontrol so that the directors act in accordance with the directions and
\ninstructions of this individual) of the Company153s local entity in Singapore, he
\nor she is subject to notification requirements under the Singapore Companies
\nAct. Some of these notification requirements will be triggered by Employee153s
\nparticipation in the Plan. Specifically, Employee is required to notify the
\nlocal Singapore company when he or she acquires or disposes an interest in the
\nCompany, including when Employee is granted the Option, receives Shares upon
\nexercise and when Employee sells these Shares. The notification must be in
\nwriting and must be made within two days of acquiring or disposing of any
\ninterest in the Company (or within two days of initially becoming a director,
\nassociate director or shadow director of the Company153s local entity in
\nSingapore). If Employee is unclear as to whether he or she is a director,
\nassociate director or shadow director of the Company153s local entity in Singapore
\nor the form of the notification, he or she should consult with his or her
\npersonal legal advisor.<\/p>\n

UNITED KINGDOM <\/u><\/strong><\/p>\n

Tax and National Insurance Contributions Acknowledgment<\/strong>. The
\nfollowing provision supplements paragraph 10 of the Agreement:<\/p>\n

Employee agrees that if Employee does not pay or the Employer or the Company
\ndoes not withhold from Employee the full amount of Tax-Related Items that
\nEmployee owes in connection with the exercise of the Option and\/or the
\nacquisition of Shares pursuant to the exercise of the Option, or the release or
\nassignment of the Option for consideration, or the receipt of any other benefit
\nin connection with the Option (the “Taxable Event<\/em>“) within ninety (90)
\ndays after the Taxable Event, or such other period specified in Section
\n222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the
\namount that should have been withheld shall constitute a loan owed by Employee
\nto the Employer, effective ninety (90) days after the Taxable Event. Employee
\nagrees that the loan will bear interest at the official rate of HM Revenue and
\nCustoms (“HMRC”) and will be immediately due and repayable by Employee, and the
\nCompany and\/or the Employer may recover it at any time thereafter by withholding
\nthe funds from salary, bonus or any other funds due to Employee by the Employer,
\nby withholding in Shares issued at exercise of the Option or from the cash
\nproceeds from the sale of such Shares or by demanding cash or a cheque from
\nEmployee. Employee also authorizes the Company to withhold the transfer of any
\nShares unless and until the loan is repaid in full.<\/p>\n

Notwithstanding the foregoing, if Employee is an officer or executive
\ndirector (as within the meaning of Section 13(k) of the U.S. Securities and
\nExchange Act of 1934, as amended), the terms of the immediately foregoing
\nprovision will not apply. In the event that Employee is an officer or executive
\ndirector and Tax-Related Items are not collected from or paid by Employee within
\nninety (90) days of the Taxable Event, the amount of any uncollected Tax-Related
\nItems may constitute a benefit to Employee on which additional income tax and
\nNational Insurance contributions may be payable. Employee will be responsible
\nfor reporting any income tax and National Insurance contributions due on this
\nadditional benefit directly to HMRC under the self-assessment regime.<\/p>\n

* * *<\/p>\n<\/p>\n

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