Exhibit 10.9

Summary of Changes to Executive Compensation Arrangements

Adoption of Performance Goals for Fiscal 2007 Cash and Performance Unit Awards

On March 26, 2007, the Compensation and Management Development Committee of the
Board of Directors of Gap Inc. (the “Committee”) named those executive officers
set forth in the tables below as participants eligible to earn cash and
performance unit awards based on performance during the 2007 fiscal year, and
established performance goals and target award percentages for each participant.

Cash Awards. The aggregate cash award payable to the named participants is based
on two separate components: (1) the financial performance of Gap Inc. and/or a
division of the Company pursuant to goals established under the Executive
Management Incentive Compensation Award Plan (the “Executive MICAP”), and (2) a
qualitative assessment of achievement of operating objectives for certain of the
participants. The base target award percentage (as a percentage of base salary)
for cash awards in the aggregate for each named participant is as set forth in
the table below. Actual cash awards payable can range from 0 to 150% (up to two
times the base target percentage set forth below for each participant) of a
participant’s base salary depending upon (1) the extent to which the financial
performance of a division and/or Gap Inc. meets, exceeds or is below target, and
(2) the qualitative assessment of operating objectives. The table below also
sets forth the percentage of the base target award percentage attributable to
each of the two bonus components.

The financial component of the aggregate cash award payable was established
under the Executive MICAP. The financial performance of a division or Gap Inc.,
as applicable and as set forth in the table below, will be based on the
achievement of an objective Earnings performance goal for the division or Gap
Inc. (as defined in the Executive MICAP) provided that no bonus will be paid
under the financial component unless a threshold amount of Earnings of the
division or Gap Inc., as the case may be, is achieved.

The operating objective component of the aggregate cash award payable is based
on a qualitative assessment by the Chief Executive Officer of the level of
achievement of certain operating objectives at year-end. The Committee approves
all bonus payouts.

 

     Cash Awards

Executive Officer

   Base Target
Percentage   

Executive MICAP

Financial

Component

   Operating Objective
Component

Donald G. Fisher

   50%    100% (Gap Inc.)    0

Marka Hansen

   75%    75% (Gap North America)    25%

Arthur Peck

   75%    75% (Gap Inc.)    25%

Byron Pollitt

   75%    75% (Gap Inc.)    25%

Dawn Robertson

   75%    75% (Old Navy)    25%

Eva Sage-Gavin

   75%    75% (Gap Inc.)    25%

Lauri Shanahan

   75%    75% (Gap Inc.)    25%

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By way of example, a participant with a base target award percentage of 75% is
eligible for a bonus of 0 to 113% (two times 75% times 75%) of base salary under
the Executive MICAP financial component and a bonus of 0 to 38% (two times 75%
times 25%) of base salary under the operating objective component.

For fiscal 2007, the financial component for Ms. Hansen will be based on the
better of: 1) the bonus that would be earned based on Banana Republic financial
results and assuming her salary prior to assumption of the role of President,
Gap North America, or 2) the bonus that would be earned based on Gap North
America financial results and assuming her current salary (as defined in the
Executive MICAP).

Performance Unit Awards. Awards payable in performance units, issued pursuant to
the Company’s 2006 Long-Term Incentive Plan, to the named participants under
Executive MICAP will be based 100% on the financial performance of Gap Inc. or
his or her division of the Company. The base target award percentage (as a
percentage of base salary) for performance unit awards for each named
participant is as set forth in the table below. The financial performance of a
division or Gap Inc., as applicable, will be based on the achievement of an
objective Earnings performance goal for the division or Gap Inc. (as defined in
the Executive MICAP) provided that no performance unit award will be paid unless
a threshold amount of Earnings of the division or Gap Inc., as the case may be,
is achieved.

Actual performance unit awards payable under the Executive MICAP can have a
value that ranges from 0 to 100% (up to two times the base target percentage set
forth in the table below for each participant) of a participant’s base salary
depending upon the extent to which the financial performance of a division or
Gap Inc. meets, exceeds or is below target. In determining the number of
performance units awarded to each participant, the value of each performance
unit will equal the closing price at which a share of the Company’s common stock
traded on the date of award, rounded down to the nearest whole unit. Each
performance unit award will be granted pursuant to a Stock Award Agreement and
will be subject to vesting as determined by the Committee on the date of award.

 

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     Performance Unit Awards

Executive Officer

  

Base Target

Percentage

 

Gap Inc. or

Division

Donald G. Fisher

   0   N/A

Marka Hansen

   50%   Gap North America

Arthur Peck

   40%   Gap Inc.

Byron Pollitt

   40%   Gap Inc.

Dawn Robertson

   50%   Old Navy

Eva Sage-Gavin

   40%   Gap Inc.

Lauri Shanahan

   40%   Gap Inc.

For fiscal 2007, the actual performance unit award payable under the Executive
MICAP for Ms. Hansen will be based on the better of: 1) the value that would be
earned based on Banana Republic financial results and assuming her salary prior
to assumption of the role of President, Gap North America, or 2) the value
earned based on Gap North America financial results and assuming her current
salary (as defined in the Executive MICAP).

Summary of Executive Officer Base Salary Changes

On March 12, 2007, the Committee made the following changes to the base salaries
of the executive officers:

Arthur Peck’s annual base salary was changed from $515,000 to $625,000 effective
March 18, 2007.

Byron Pollitt’s annual base salary was changed from $700,000 to $725,000
effective March 18, 2007.

Eva Sage-Gavin’s annual base salary was changed from $515,000 to $535,000
effective March 18, 2007.

 

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