Grant No.______
THE GAP, INC.
RESTRICTED STOCK AWARD AGREEMENT
The Gap, Inc. (the "Company") hereby grants to _______ (the
"Employee"), an award of Restricted Stock under The Gap, Inc. 1996 Stock Option
and Award Plan (the "Plan"). This award is subject to all of the terms and
conditions contained in this Agreement, including the terms and conditions
contained in the attached Appendix A. The date of this Agreement is _____.
Subject to the provisions of Appendix A and of the Plan, the principal features
of this award are as follows:
Number of Shares:
Date of Grant:
Date(s) Restrictions on
Shares Scheduled to Lapse:
As provided in the Plan and in this Agreement, this award may
terminate before the restrictions on all or part of the shares lapse. For
example, if Employee's employment ends before the date the restrictions lapse,
this award will terminate and the shares awarded shall revert to the Company.
See paragraph 4 of Appendix A for further information concerning how changes in
employment affect termination of this award.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement, in duplicate, to be effective as of the date first above written.
THE GAP, INC.
Dated: ________________________________________________
Donald G. Fisher
Chairman of the Board
My signature below indicates that I understand that this award is
subject to all of the terms and conditions of this Agreement (including the
attached Appendix A) and of the Plan.
EMPLOYEE
Dated: ______________________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Social Security No.:
__________________________________
APPENDIX A
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD
1. Grant of Award. The Company hereby grants to Employee for past
services and as a separate incentive in connection with his or her employment
and not in lieu of any salary or other compensation for his or her services, an
award of the number of restricted shares of common stock of the Company, $0.05
par value, set forth on page 1 of this Agreement, which shares of Restricted
Stock shall be granted on the date hereof, subject to all the terms and
conditions in this Agreement and the Plan.
2. Shares held in Escrow. Unless and until the restrictions on the
shares of Restricted Stock shall have lapsed in the manner set forth in
paragraph 3 below, such shares shall be issued in the name of Employee and held
by the Secretary of the Company as escrow agent (the "Escrow Agent"), and
shall not be sold, transferred or otherwise disposed of and shall not be
pledged or otherwise hypothecated. The Company may instruct the transfer agent
for its common stock to place a legend on the certificates representing the
Restricted Stock or otherwise note its records as to the restrictions on
transfer set forth in this Agreement and the Plan. The certificate or
certificates representing such shares shall be delivered by the Escrow Agent to
Employee only after the restrictions on such shares have lapsed and all other
terms and conditions in this Agreement have been satisfied.
3. Lapse of Restrictions. Subject to the provisions of paragraph
3(b), the restrictions on the shares of Restricted Stock awarded by this
Agreement shall lapse with respect to a number of shares on a date (the "Lapse
Date") determined under paragraph 3(a).
The Lapse Date shall be as set forth on page 1 of this
Agreement.
If compliance with a trading restriction imposed by the
Company's policy prohibiting trading on undisclosed material information, as
set forth in the Company's Corporate Compliance Manual (the "Insider Trading
Policy") would prohibit Employee from selling any shares of the Company's
common stock on a Lapse Date set forth in paragraph 3(a), then the Lapse Date
with respect to that number of shares which would otherwise become vested
pursuant to paragraph 3(a) shall be the earlier of (i) the first subsequent day
on which both (A) the Company's common stock is traded on a national securities
exchange within the meaning of Section 6 of the Securities and Exchange Act of
1934, as amended (the "Exchange Act") (such as the New York Stock Exchange) or
a national market system within the meaning of Section 11A of the Exchange Act
and (B) on which Employee may sell shares of the Company's common stock without
violating the Insider Trading Policy, or (ii) the date which is ninety (90)
days after the Lapse Date set forth in paragraph 3(a).
4. Termination of Service or Change in Status. The shares of
Restricted Stock as to which restrictions have not lapsed at the time of
Employee's Termination of Service shall thereupon be forfeited and
automatically transferred to and reacquired by the Company at no cost to the
Company. Notwithstanding paragraph 3 or any other provision of this Agreement,
prior to the date the restrictions on the shares of Restricted Stock awarded by
this Agreement are deemed to have lapsed, the Committee, in its sole
discretion, may determine that such restrictions shall never lapse as to all or
part of the shares specified in paragraph 1 (and as adjusted pursuant to
paragraph 10, if appropriate), in which case the award shall terminate as to
such shares and such shares shall thereupon be forfeited and automatically
transferred to and reacquired by the Company at no cost to the Company. The
Committee shall exercise such power only if the Committee, in its sole
discretion, determines that (a) Employee's employment with the Company or an
Affiliate has been reduced to less than a full-time basis, and/or (b) Employee
has transferred to a position which, under the Committee's then existing
policy, normally would not qualify Employee to be granted an award of
Restricted Stock or to be granted an award of the number of shares of
Restricted Stock granted under this Agreement. Employee hereby appoints the
Escrow Agent with full power of substitution, as Employee's true and lawful
attorney-in-fact with irrevocable power and authority in the name and on behalf
of Employee to take any action and execute all documents and instruments,
including, without limitation, stock powers which may be necessary to transfer
the certificate or certificates evidencing such unvested shares to the Company
upon such Termination of Service or determination by the Committee.
5. Continuous Employment Required. Restrictions on shares of
Restricted Stock shall not lapse in accordance with any of the provisions of
this Agreement unless Employee shall have been continuously employed by the
Company or by one of its Affiliates from the date of the award until the date
such restrictions are deemed to have lapsed.
6. Withholding Taxes. Notwithstanding anything in this Agreement
to the contrary, no certificate representing Restricted Stock may be released
from the escrow established pursuant to paragraph 2 of this Agreement unless
and until Employee shall have delivered to the Company or its designated
Affiliate, the full amount of any federal, state or local income and other
taxes which the Company or such Affiliate may be required by law to withhold
with respect to such shares.
7. Beneficiary Designation. Any distribution or delivery to be
made to Employee under this Agreement shall, if the Employee is then deceased,
be made to the Employee's designated beneficiary, or if no such beneficiary
survives the Employee, the person or persons entitled to such distribution or
delivery under the Employee's will or, if the Employee shall fail to make
testamentary disposition of such property, the executor of his or her estate.
In order to be effective, a beneficiary designation must be made by the
Employee in a form and manner acceptable to the Committee. Any transferee must
furnish the Company with (a) written notice of his or her status as transferee,
and (b) evidence satisfactory to the Company to establish the validity of the
transfer and compliance with any laws or regulations pertaining to said
transfer.
8. Conditions to Issuance of Shares. The shares of stock
deliverable to Employee may be either previously authorized but unissued shares
or issued shares which have been reacquired by the Company. The Company shall
not be required to issue any certificate or certificates for shares of stock
hereunder prior to fulfillment of all of the following conditions: (a) The
admission of such shares to listing on all stock exchanges on which such class
of stock is then listed; (b) The completion of any registration or other
qualification of such shares under any State or Federal law or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee shall, in its absolute
discretion, deem necessary or advisable; (c) The obtaining of any approval or
other clearance from any State or Federal governmental agency, which the
Committee shall, in its absolute discretion, determine to be necessary or
advisable; and (d) The lapse of such reasonable period of time following the
date of grant of the Restricted Stock as the Committee may establish from time
to time for reasons of administrative convenience.
9. Rights as Stockholder. Except as otherwise provided in this
Agreement, after the date of this Agreement, Employee shall have all rights of
a stockholder of the Company with respect to voting such shares and receipt of
dividends and distributions on such shares.
10. Changes in Stock. In the event that as a result of a stock
dividend, stock split, reclassification, recapitalization, combination of
shares or the adjustment in capital stock of the Company or otherwise, or as a
result of a merger, consolidation, spin-off or other reorganization, the
Company's common stock shall be increased, reduced or otherwise changed, and by
virtue of any such change Employee shall in his or her capacity as owner of
unvested shares of Restricted Stock which have been awarded to him or her (the
"Prior Shares") be entitled to new or additional or different shares of stock
or securities (other than rights or warrants to purchase securities), such new
or additional or different shares or securities shall thereupon be considered
to be unvested Restricted Stock and shall be subject to all of the conditions
and restrictions which were applicable to the Prior Shares pursuant to the
Plan. If an Employee receives rights or warrants with respect to any Prior
Shares, such rights or warrants may be held or exercised by the Employee,
provided that until such exercise any such rights or warrants and after such
exercise any shares or other securities acquired by the exercise of such rights
or warrants shall be considered to be unvested Restricted Stock and shall be
subject to all of the conditions and restrictions which were applicable to the
Prior Shares pursuant to the Plan.
11. Plan Governs. This Agreement is subject to all the terms and
provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Terms used in this Agreement that are not
defined in this Agreement shall have the meaning set forth in the Plan.
12. Committee Authority. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon Employee, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
this Agreement.
13. No Right to Continued Employment. The Employee understands
and agrees that this Agreement does not impact in any way the right of the
Company, or the Affiliate employing the Employee, as the case may be, to
terminate or change the terms of the employment of the Employee at any time for
any reason whatsoever, with or without good cause. The Employee understands
and agrees that his or her employment is "at-will" and that either the Company
or the Employee may terminate Employee's employment at any time and for any
reason. Employee also understands and agrees that his or her "at-will" status
can only be changed by an express written contract signed by an authorized
officer of the Company and the Employee.
14. Non-Transferability of Award. Except as otherwise herein
provided, the Restricted Stock herein granted and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of such award, or of
any right or privilege conferred hereby, contrary to the provisions hereof, or
upon any attempted sale under any execution, attachment or similar process upon
the rights and privileges conferred hereby, such award and the rights and
privileges conferred hereby shall immediately become null and void.
15. Binding Agreement. Subject to the limitation on the
transferability of the Restricted Stock contained herein, this Agreement shall
be binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successors and assigns of Employee and the Company.
16. Addresses for Notices. Any notice to be given to the Company
under the terms of this Agreement shall be addressed to the Company, in care of
its Law Department, at The Gap, Inc., One Harrison, San Francisco, California
94105, or at such other address as the Company may hereafter designate in
writing. Any notice to be given to the Employee shall be addressed to the
Employee at the address set forth beneath the Employee's signature hereto, or
at such other address as the Employee may hereafter designate in writing. Any
such notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, registered or certified and
deposited, postage and registry fee prepaid, in a United States post office.
17. Captions. Captions provided herein are for convenience only
and are not to serve as a basis for interpretation or construction of this
Agreement.
18. Agreement Severable. In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.