Stock Ownership Requirements for Gap Inc. Executives

The Gap Inc. ("Company") Board of Directors believes that Company executives should have a meaningful ownership stake in the Company to underscore the importance of linking executive and shareholder interests, and to encourage a long-term perspective in managing the enterprise. Therefore, the Board of Directors adopted formal stock ownership requirements for the executives listed below.

Executive Position	Minimum Stock Ownership Requirement (number of shares)
President and CEO	150,000
Division President	50,000
Corporate Executive Vice President	25,000

 

 

•	Executives have five years from December 1, 2004, to meet the stock ownership requirement. Newly appointed executives have five years from the time they are named an executive to meet the stock ownership requirement.
•	For purposes of determining stock ownership levels, the following forms of equity interests in the Company count towards the stock ownership requirement:

•	Shares held within a 401(k) Plan
•	Shares obtained through an Employee Stock Purchase Plan
•	Restricted or Performance shares/units (vested or unvested)
•	Shares obtained through stock option exercise
•	Shares purchased on the open market
•	Notional shares held in the Supplemental Deferred Compensation Plan
•	Shares held in trust for the economic benefit of the executive or spouse or dependent children of the executive
•	Shares owned jointly or separately by the spouse or dependent children of the executive

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Company executives are prohibited from speculating in the Company's stock, including the use of short sales, "sales against the box" or any equivalent transaction involving the Company's stock. In addition, executives who are subject to the Company's stock ownership requirements may not engage in any other hedging transactions, such as "cashless" collars, forward sales, equity swaps and other similar or related arrangements, with respect to the shares that they hold in satisfaction of those ownership requirements.

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These requirements may be reevaluated from time to time, including when there are changes in the Company's capital structure.