Exhibit 10.32

FIRST AMENDMENT

TO

GAP INC. SUPPLEMENTAL DEFERRED COMPENSATION PLAN

WHEREAS, The Gap, Inc. (the “Company”) maintains the Gap Inc. Supplemental
Deferred Compensation Plan (the “Plan”); and

WHEREAS, amendment of the Plan now is considered desirable;

NOW, THEREFORE, IT IS RESOLVED that, pursuant to the power reserved to the
Company under Section 12 of the Plan, and in exercise of the authority delegated
to the undersigned officer by resolutions of the Compensation and Management
Development Committee of the Company dated May 8, 2006, the Plan is hereby
amended in the following particulars:

1. Effective as of May 8, 2006, by substituting the following in place of
subsection 1.3 of the Plan:

“1.3 Plan Administration

The Company shall be the administrator (as that term is defined in
Section 3(16)(A) of ERISA) of the Plan and shall be responsible for the
administration of the Plan; provided, however, the Company may delegate all or
any part of its powers, rights and duties under the Plan to such person or
persons as it may deem advisable. Any notice or document relating to the Plan
which is to be filed with the Company may be delivered, or mailed by registered
or certified mail, postage pre-paid, to the Company, or to any designated
Company representative, in care of the Company, at its principal office.”

2. Effective as of May 8, 2006, by substituting the word “Company” in place of
the word “Committee” in each place the latter word appears in the first sentence
of subsection 2.2, subsection 2.27, Sections 3, 4, 6, 7, and 9, subsections
10.13 through 10.17, and subsections 11.5 through 11.8 of the Plan.

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3. Effective as of May 8, 2006, by substituting the phrase “US Savings Plan
Investment Committee” in place of the phrase “Global Benefits Committee” where
the latter phrase appears in subsection 2.8 of the Plan.

4. Effective January 1, 2008, by adding the following sentence to the end of
subsection 2.21 of the Plan:

“By becoming a Participant and making deferrals under this Plan, each
Participant agrees to be bound by the provisions of the Plan and the
determinations of the Company and the Committee hereunder.”

5. Effective January 1, 2008, by substituting the following in place of
subsection 2.27 of the Plan:

“2.27 Termination Date

‘Termination Date’ means, with respect to an Employee Participant, the date on
which the Participant has a separation from service (within the meaning of
Section 409A of the Code and the regulations, notices and other guidance
thereunder, including death) with the Employers, the Company and any subsidiary
or affiliate of the Company, and, with respect to a non-employee Board member
Participant, the date on which the Board member resigns, is removed or otherwise
terminates service on the Board (including death). The date that an Employee’s
performance of services for all the Employers is reduced to a level of less than
20% of the average level of services performed in the preceding 36-month period,
shall be considered a Termination Date, and the performance of services at a
level of 50% or more of the average level of services performed in the preceding
36-month period shall not be considered a Termination Date.”

6. Effective as of January 1, 2006, by substituting the phrase “Eligible
Individual eligible to participate in the Plan while he is determined by the
Company to satisfy the criteria described in (a) immediately preceding, who is
eligible to participate in the Plan” in place of the phrase “Eligible Individual
eligible to participate in the Plan” where the latter phrase appears in the
first sentence of subsection 3.1 of the Plan.

 

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7. Effective as of January 1, 2006, by substituting the phrase “total
remuneration from the Employer while the Participant is an Eligible Individual
which” in place of the phrase “total remuneration from the Employer which” where
the latter phrase appears in the first sentence of subsection 2.10 of the Plan.

8. Effective as of January 1, 2006, by substituting the word “satisfied” in
place of the word “satisifed” where the latter word appears in subsection 3.3 of
the Plan.

9. Effective as of December 30, 2006, by substituting the following in place of
the second sentence of the first paragraph of subsection 4.1 of the Plan:

“Except as otherwise provided in this subsection, a Participant’s deferral
election for a Plan Year under this subsection must be made not later than
December 31 of the preceding Plan year with respect to Compensation earned
during the first payroll period of the next calendar year (considered for
purposes of the Plan to be the payroll period containing December 31 of the
prior year) or, in the case of Board Members, Compensation earned in fiscal year
quarters beginning on and after January 1 of the following calendar year.”

10. Effective as of January 1, 2007, by substituting the following in place of
the second-to-last sentence of the first paragraph of subsection 4.1 of the
Plan:

“Any such deferral election under this subsection must be made within 30 days of
the date the Employee or Board Member first becomes an Eligible Individual;
provided, however, that the date that an Employee or Board Member first becomes
Eligible for the Plan shall be determined based on proper notification of the
Employee or Board Member by the Company in accordance with procedures determined
by the Company.”

 

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11. Effective January 1, 2008, by adding the following after the first paragraph
of subsection 4.1 of the Plan:

“In the case of an Employee, or non-employee Board member who is rehired (or who
recommences Board Service) after having previously been an Eligible Individual,
the phrase ‘first becomes an Eligible Individual’ in the first sentence of the
preceding paragraph shall be interpreted to apply only where the Eligible
Individual is rehired (or recommences Board Service or recommences providing
services to an Employer) at least 24 months after his last day as a previously
Eligible Individual prior to again becoming such an Eligible Individual. In all
other cases such rehired Employee or Board Member may not elect to make
Compensation Deferrals until the next date determined by the Company with
respect to Compensation earned after the following January 1. Similarly, in the
case of an Employee who recommences status as an Eligible Individual for any
other reason after having previously lost his status as an Eligible Individual
(due to Compensation fluctuations, transfer from an ineligible location or job
classification, or otherwise), the phrase ‘first becomes an Eligible Individual’
shall be interpreted to apply only where the Eligible Individual regains his
status as an Eligible Individual at least 24 months after his last day as a
previously Eligible Individual prior to again becoming such an Eligible
Individual. In all other cases such Re-Eligible Participant may not elect to
make Compensation Deferrals until the next date determined by the Company with
respect to Compensation earned after the following January 1.”

12. Effective as of December 30, 2006, by substituting the following in place of
the first sentence of the second paragraph of subsection 4.1 of the Plan:

“An election to make Compensation Deferrals under this subsection 4.1 shall be
irrevocable, and shall remain in effect for Compensation earned during the last
payroll period ending on or before December 30 of the calendar year to which the
election applies while the Participant is an Eligible Individual (except as
provided in subsection 4.4) (or, in the case of non-Employee Board members, for
Compensation earned through the Fiscal Year quarter that ends on or after
December 31 of the calendar year to which the election applies).”

 

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13. Effective January 1, 2008, by substituting the following three sentences in
place of the third sentence of subsection 4.2 of the Plan:

“Notwithstanding the foregoing, effective January 1, 2008, an Employee who first
becomes an Eligible Individual during a Plan Year by virtue of commencement of
employment with the Employers shall be permitted to make a Bonus Deferral
election to defer receipt of up to 90 percent (or such other amount as
determined by the Company) of his Bonus (other than his Sign-on Bonus) into the
Plan, but only if he makes such election within 30 days of first becoming an
Eligible Individual. In case such Bonus Deferral election in the first year of
eligibility described in the preceding sentence is made after the beginning of
the Bonus performance period, the Bonus Deferral election will apply only to the
portion of the Bonus equal to the total amount of the Bonus for the performance
period multiplied by the ratio of the number of days remaining in the
performance period after the effective date of the Bonus Deferral election over
the total number of days in the performance period. If an Eligible Individual
does not elect to make a Bonus Deferral election during that initial 30-day
period, he may not later elect to make an election for that performance period
under this subsection.”

14. Effective as of May 8, 2006, by substituting the phrase “the Company” in
place of the phrase “the Committee” where the latter phrase appears in the first
four sentences of subsection 5.2 of the Plan, the second-to-last sentence of
subsection 5.2 of the Plan, and the last sentence of subsection 5.3 of the Plan.

15. Effective January 1, 2008, by substituting the following in place of the
second sentence of subsection 9.1 of the Plan:

“Subject to subsection 9.3 hereof, it is the Company’s intention to distribute a
Participant’s Accounts payable in a lump sum under this subsection 9.1 on the
first day of the fourth month following the Participant’s Termination Date, or,
if calculation of the amount of the payment is not administratively practicable
due to events beyond the control of the Participant or his beneficiary, during
the first calendar year in which the calculation of the amount is
administratively practicable.”

16. Effective January 1, 2008, by substituting the following in place of the
first sentence of the last paragraph of subsection 9.1 of the Plan:

“Subject to subsection 9.3 hereof, it is the intention of the company to make
payments pursuant to an in-service distribution election under subparagraphs
(a) or (b) of this subsection 9.1 by the end of the calendar year in which the
payment was elected to be made, or, if calculation of the amount of the payment
is not administratively practicable due to events beyond the control of the
Participant or his beneficiary, during the first calendar year in which the
calculation of the amount is administratively practicable.”

 

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17. Effective January 1, 2008, by inserting the following sentence after the
second sentence of subsection 9.2 of the Plan:

“Subject to subsection 9.3 hereof, it is the Company’s intention to distribute a
Participant’s Accounts payable in a lump sum under this subsection 9.2 on the
first day of the fourth month following the Participant’s Termination Date, or,
if calculation of the amount of the payment is not administratively practicable
due to events beyond the control of the Participant or his beneficiary, during
the first calendar year in which the calculation of the amount is
administratively practicable.”

18. Effective January 1, 2008, by substituting the following in place of the
first sentence of subsection 9.2(b) of the Plan:

“It is the intention of the Company to make the first installment payment by the
end of the calendar year in which occurs the Participant’s Retirement Date or
death, or, if calculation of the amount of the payment is not administratively
practicable due to events beyond the control of the Participant or his
beneficiary, during the first calendar year in which the calculation of the
amount is administratively practicable.”

19. Effective January 1, 2008, by substituting the following in place of
subsection 9.3 of the Plan:

“9.3 Key Employees

Notwithstanding anything herein to the contrary, and subject to Code
Section 409A, payment shall not be made or commence as a result of the
Participant’s Termination Date to any Participant who is a key employee (defined
below) before the date that is not less than six months after the Participant’s
Termination Date. For this purpose, a key employee includes a ‘specified
employee’ (as defined in Code Section 409A(a)(2)(B)) during the entire 12-month
period determined by the Company ending with the annual date upon which key
employees are identified by the Company, and also including any Employee
identified by the Company in good faith with respect to any distribution as
belonging to the group of identified key employees, to a maximum of 200 such key
employees, regardless of whether such Employee is subsequently determined

 

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by the Employer, any governmental agency, or a court not to be a key employee.
In the event amounts are payable to a key employee in installments in accordance
with subsection 9.2, the first installment shall be delayed by six months, with
all other installment payments payable as originally scheduled. The
identification date for determining key employees shall be each December 31 (and
the new key employee list shall be updated and effective each subsequent
April 1).”

20. Effective January 1, 2008, by substituting the phrase “the applicable dollar
amount under Section 402(g) of the Code,” in place of the phrase “$10,000” where
the latter phrase appears in subsection 9.4 of the Plan.

21. Effective January 1, 2008, by substituting the following in place of the
second sentence of subsection 9.4 of the Plan:

“Subject to subsection 9.3 hereof, it is the Company’s intention to distribute a
Participant’s Accounts payable in a lump sum under this subsection 9.4 on the
first day of the fourth month following the Participant’s Termination Date, or,
if calculation of the amount of the payment is not administratively practicable
due to events beyond the control of the Participant or his beneficiary, during
the first calendar year in which the calculation of the amount is
administratively practicable.”

22. Effective as of May 8, 2006, by substituting the phrase “the Company
reserves the right” in place of the phrase “the Company and the Committee
reserve the right” where the latter phrase appears throughout Section 12 of the
Plan.

23. Effective as of May 8, 2006, by substituting the title “SECTION 11 PLAN
ADMINISTRATION” in place of the title “SECTION 11 THE COMMITTEE” in Section 11
of the Plan, and by substituting the following in place of subsection 11.1 of
the Plan and the first paragraph of subsection 11.2 immediately preceding
subparagraph 11.2(a) of the Plan:

“11.1 Establishment of Committee

The Plan shall be administered by the Company. A Committee established by the
Company, which as of May 8, 2006 is the US Savings Plan Investment Committee,
shall be responsible for the duties described in subsection 11.2 below.

 

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11.2 Committee General Powers, Rights and Duties

Except as otherwise specifically provided herein, and in addition to the powers,
rights and duties specifically given to the Committee elsewhere in the Plan or
otherwise delegated to the Committee by the Company or the Compensation and
Management Development Committee, the Committee shall have the full power and
authority for the establishment of an investment policy for the Plan, and the
selection, monitoring, and termination of notional investment options for the
Plan, and such other powers, rights and duties as may be described from time to
time in the Committee’s Charter. Except as otherwise specifically provided
herein, and in addition to the powers, rights and duties specifically given to
the Company elsewhere in the Plan, the Company shall have the following powers,
rights and duties, which shall be exercisable in the sole discretion of the
Company:”

24. Effective as of May 8, 2006, by substituting the word “Company” in place of
the word “Committee” where the latter word appears in subparagraphs 11.2 (d),
(h) and (i) of the Plan.

*        *        *

IN WITNESS WHEREOF, the undersigned officer has executed this amendment on
behalf of the Company, this 19th day of December, 2007.

 

THE GAP, INC. By:   /s/ William Tompkins   Vice President, Total Rewards

 

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