Grant No. _________
THE GAP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT (CONSULTANT)
The Gap, Inc. (the "Company") hereby grants to
___________________ ("Consultant"), a stock option under The Gap, Inc. 1996
Stock Option and Award Plan (the "Plan"), to purchase shares of common stock
of the Company, $0.05 par value ("Shares"). This option 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 option are as follows:
Number of Shares
Purchasable with this Option: ________
Price per Share: ________
Date Option was Granted: ________
Date Option is
Scheduled to become Exercisable: ________
Latest Date Option Expires: ________
As provided in the Plan and in this Agreement, this option may
terminate before the date written above, including before the option becomes
exercisable or is exercised. For example, if Consultant's service
relationship ends before the date this option becomes exercisable, this option
will terminate at the same time as Consultant's service relationship
terminates. See paragraphs 5, 6 and 7 of Appendix A for further information
concerning how changes in service relationship affect termination of this
option. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC
TERMS AND CONDITIONS OF THIS OPTION.
Consultant is an independent contractor and not an employee of
the Company. See paragraph 21 of Appendix A for further information
concerning consultant's independent contractor status.
IN WITNESS WHEREOF, the Company and Consultan
t have executed this Agreement, in duplicate, to be effective as of the date
first above written.
THE GAP, INC.
Dated: ________ _________________________________________
Millard S. Drexler
President and Chief Executive Officer
My signature below indicates that I understand that this option
is subject to all of the terms and conditions of this Agreement (including the
attached Appendix A) and of the Plan.
CONSULTANT
Dated: _______________________
______________________________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Social Insurance No.:
________________________
APPENDIX A
TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION (CONSULTANT)
1. Grant of Option. The Company hereby grants to
Consultant under the Plan, as a separate incentive in connection with his or
her service relationship and not in lieu of any salary or other compensation
for his or her services, a non-qualified stock option to purchase, on the terms
and conditions set forth in this Agreement and the Plan, all or any part of the
number of Shares set forth on page 1 of this Agreement. The option granted
hereby is not intended to be an Incentive Stock Option within the meaning of
Section 422 of the Code.
2. Exercise Price. The purchase price per Share (the
"Option Price") shall be equal to the price set forth on page 1 of this
Agreement. The Option Price shall be payable in the legal tender of the United
States.
3. Number of Shares. The number and class of Shares
specified in paragraph 1 above, and/or the Option Price, are subject to
appropriate adjustment in the event of changes in the capital stock of the
Company by reason of stock dividends, split-ups or combinations of shares,
reclassifications, mergers, consolidations, reorganizations or liquidations.
Subject to any required action of the stockholders of the Company, if the
Company shall be the surviving corporation in any merger or consolidation, the
option granted hereunder (to the extent that it is still outstanding) shall
pertain to and apply to the securities to which a holder of the same number of
Shares that are then subject to the option would have been entitled. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Compensation and Stock Option
Committee of the Company's Board of Directors (the "Committee"), whose
determination in that respect shall be final, binding and conclusive.
4. Commencement of Exercisability. Except as otherwise
provided in this Agreement, the right to exercise the option awarded by this
Agreement shall accrue as set forth on page 1 of this Agreement, assuming that
Consultant is still engaged by the Company or an Affiliate on such date(s). If
Consultant is not in a service relationship with the Company on such date(s),
the option shall terminate, as set out in paragraph 7.
5. Postponement of Exercisability. Notwithstanding
paragraph 4 or any other provision of this Agreement, prior to the date this
option is scheduled to become exercisable, the Committee, in its sole
discretion, may determine that the right to exercise the option awarded by this
Agreement shall accrue on a date later than such date. The Committee shall
exercise its power to postpone the commencement of exercisability only if the
Committee, in its sole discretion, determines that Consultant has taken a
personal leave of absence (as defined from time to time by the Committee) since
the date of this Agreement. The duration of the period of postponement shall
equal the duration of the personal leave of absence. If Consultant does not
return from the personal leave of absence, the option shall terminate as set
out in paragraph 7.
6. Elimination of Exercisability. Notwithstanding
paragraph 4 or any other provision of this Agreement, prior to the date this
option is scheduled to become exercisable, the Committee, in its sole
discretion, may determine that the right to exercise the option awarded by this
Agreement shall never accrue as to all or part of the Shares specified in
paragraph 1 (and as adjusted pursuant to paragraph 3, if appropriate), in which
case the option shall terminate as to such Shares. The Committee shall
exercise such power only if the Committee, in its sole discretion, determines
that Consultant's service relationship with the Company or an Affiliate has
been reduced to less than the number of hours which was the subject of the
service relationship as of the date of this Agreement.
7. Termination of Option. In the event that Consultant's
service relationship with the Company or an Affiliate terminates for any reason
other than death, this option shall immediately thereupon terminate. In the
event that Consultant shall die while engaged by the Company or an Affiliate,
any unexercised portion of the option (whether or not exercisable) may be
exercised by Consultant's beneficiary or transferee, as hereinafter provided,
for a period of one (1) year after the date of Consultant's death or within ten
(10) years from the date of this Agreement, whichever shall first occur.
Notwithstanding the preceding two sentences, in the event that within one year
of the date of this Agreement, Consultant dies, this option shall immediately
thereupon terminate.
8. Persons Eligible to Exercise. The option shall be
exercisable during Consultant's lifetime only by Consultant. The option shall
be non-transferable by Consultant other than by a beneficiary designation made
in a form and manner acceptable to the Committee, or by will or the applicable
laws of descent and distribution.
9. Death of Consultant. To the extent exercisable after
Consultant's death, the option shall be exercised only by Consultant's
designated beneficiary or beneficiaries, or if no beneficiary survives
Consultant, by the person or persons entitled to the option under Consultant's
will, or if Consultant shall fail to make testamentary disposition of the
option, his or her legal representative. Any transferee exercising the option
must furnish the Company (a) written notice of his or her status as transferee,
(b) evidence satisfactory to the Company to establish the validity of the
transfer of the option and compliance with any laws or regulations pertaining
to said transfer, and (c) written acceptance of the terms and conditions of the
option as prescribed in this Agreement.
10. Exercise of Option. The option may be exercised by the
person then entitled to do so as to any Shares which may then be purchased
(a) by giving written notice of exercise to the Company, specifying the number
of full Shares to be purchased and accompanied by full payment of the purchase
price thereof (and the amount of any income tax the Company determines is
required to be withheld by reason of such exercise), and (b) by giving
satisfactory assurances in writing if requested by the Company, signed by the
person exercising the option, that the Shares to be purchased upon such
exercise are being purchased for investment and not with a view to the
distribution thereof.
11. No Rights of Stockholder. Neither Consultant nor any
person claiming under or through said Consultant shall be or have any of the
rights or privileges of a stockholder of the Company in respect of any of the
Shares issuable upon the exercise of the option, unless and until certificates
representing such Shares shall have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to Consultant.
12. No Right to Continuation of Service Relationship.
Consultant understands and agrees that this Agreement does not impact in any
way the right of the Company, or the Affiliate engaging Consultant, as the case
may be, to terminate or change the terms of the service relationship of
Consultant at any time for any reason whatsoever, with or without good cause.
Consultant's service relationship may be terminated by either the Company or
Consultant.
13. 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 Consultant shall be addressed
to Consultant at the address set forth beneath Consultant's signature hereto,
or at such other address as Consultant 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.
14. Non-Transferability of Option. Except as otherwise
herein provided, the option 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 said option, 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, said option and the rights and
privileges conferred hereby shall immediately become null and void.
15. Maximum Term of Option. Notwithstanding any other
provision of this Agreement, this option is not exercisable after the
expiration of ten (10) years from the date of this Agreement.
16. Binding Agreement. Subject to the limitation on the
transferability of the option contained herein, this Agreement shall be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
17. Plan Governs. This Agreement is subject to all 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 and not defined in this
Agreement shall have the meaning set forth in the Plan.
18. 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 Consultant, 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.
19. Captions. Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.
20. 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.
21. Independent Contractor. Consultant acknowledges that
he or she will act at all times as an independent contractor and not as an
employee of the Company or its Affiliates. Accordingly, Consultant understands
that (unless expressly required by the laws of a foreign jurisdiction to which
Consultant is subject) the Company will not pay, or withhold from Consultant,
under this Agreement any F.I.C.A. (social security), state unemployment or
disability insurance premiums, state or federal income taxes, or other taxes,
and that Consultant is responsible for paying any applicable federal self-
employment tax (in lieu of F.I.C.A.), state and federal income taxes (including
estimated tax payments) and other applicable taxes. Consultant waives all
rights to any benefits available to employees of the Company not otherwise set
forth in a written agreement between Consultant and the Company or its
Affiliates and signed by an authorized officer. Consultant further agrees that
he or she will indemnify the Company and its Affiliates against any claim
asserted against the Company and its Affiliates for Consultant's failure to
comply with his or her obligations under this paragraph.