Exhibit 10.1

[GAP INC. LETTERHEAD]

April 26, 2012

Stefan Larsson
    
    
Dear Stefan,

It is our pleasure to offer you a position at Gap Inc. We’re a company driven by
passion, innovation and a focus on quality—the same characteristics we look for
in our employees. You reflect these values and we feel confident you will find
rewarding opportunities with us. We believe this will be both a professionally
and personally fulfilling journey for you and your family. We know you’ll make a
real difference to our culture, performance and long-term prospects.
 
This letter (“letter”) sets forth our offer to you to join Gap Inc. as Global
President, Old Navy. This position is based in San Francisco. In this position
you will report to Glenn Murphy, Chairman & CEO, Gap Inc. You will have
responsibility for the management and operation of our Old Navy division in all
its locations. This includes responsibility for Old Navy’s P&L, as well as for
the design, merchandising, production and other operations of the Old Navy
division.

Work Authorization. The Company will sponsor a visa application for you to work
in the United States. Included in this application will be a dependent visa that
will enable your immediate family to accompany you to live in the United States.
You agree to fully cooperate with the Company in the timely filing of the
application. The Company will pay for all fees and expenses associated with
obtaining your visa and authorization to work for the Company in the United
States. Should you wish, the Company will also sponsor you for permanent work
authorization (“green card”) in the United States. Once we begin that process,
then we will be able to apply for interim work authorization for your spouse. As
the Company is not permitted under U.S. law to employ individuals unless they
have work authorization, we will need to have that in place before your Start
Date. We will work diligently to get that authorization, but of course, we can
make no representations regarding the timing or certainty of obtaining valid
U.S. work authorizations.

Salary. Your annual salary will be USD $1,000,000 payable every two weeks.

Start Date. Your first day with Gap Inc. (“Start Date”) will be October 29,
2012.

Initial Bonus. You will receive a bonus of $350,000 within 30 calendar days of
your Start Date. The amount paid will be treated as supplemental wages for U.S.
federal and applicable state income tax withholding purposes. In the event you
voluntarily terminate your employment or your employment is terminated for Good
Cause or For Cause (both as defined below, and whichever definition is in effect
at the time of termination), you will be required to repay within ninety (90)
days of your last day of employment 100% of this bonus if the termination occurs
within one year of the date you receive this bonus, and 50% of this bonus if
termination occurs between one year and two years from the date you receive this
bonus.

Annual Bonus. Based on your position, beginning in fiscal 2013 you will be
eligible for an Annual Bonus (“Annual Bonus”). You will not be eligible to
participate for fiscal 2012. Under the current program, the bonus is based on
Gap Inc. and/or Division financial objectives (weighted at 75%) as well as key
business goals and individual performance (weighted at 25%); the annual target
bonus is 75% of base salary with a maximum opportunity of 150%. Bonus payments
are prorated based on active time in position, divisional or country assignment
and changes in base salary or incentive target that may occur during the fiscal
year. Bonuses for fiscal 2013 are scheduled for payment in March 2014. As with
all plan participants, you must be employed by Gap Inc. on the payment date.
Management discretion can be used to modify the final award amount.

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Stefan Larsson
April 26, 2012
Page 2

Long-Term Incentive Awards. Your offer includes long-term incentive awards,
which give you the opportunity to share in Gap Inc.’s success over time.

Stock Options. The Compensation and Management Development Committee of the
Board of Directors (“the Committee”) has approved, subject to the provisions of
Gap Inc.’s stock plan, a grant of options to you to purchase 200,000 shares of
Gap Inc. common stock on your first day of employment (the “date of grant”). The
option price shall be determined by the fair market value of the stock on the
date of grant. These options will become vested and exercisable as shown in the
schedule below, provided you are employed by Gap Inc. on the vesting date. These
options must be exercised within ten years from the date of grant or within
three months of your employment termination, whichever is earlier, or you will
lose your right to do so.

Option to purchase 50,000 shares vesting on the first anniversary of the date of
grant.
Option to purchase 50,000 shares vesting on the second anniversary of the date
of grant.
Option to purchase 50,000 shares vesting on the third anniversary of the date of
grant.
Option to purchase 50,000 shares vesting on the fourth anniversary of the date
of grant.

Stock Awards. The Committee has approved, subject to the provisions of Gap
Inc.’s stock plan, a grant of stock awards to you covering 200,000 shares of Gap
Inc. common stock on your first day of employment (the “date of grant”). Awards
are in the form of units that are paid in Gap Inc. stock upon vesting. The award
will become vested as shown in the schedule below, provided you are employed by
Gap Inc. on the vesting date. Awards are subject to income tax withholding upon
delivery to you of shares of Gap Inc. stock in settlement of your award.

Stock Award of 50,000 shares vesting on the first anniversary of the date of
grant.
Stock Award of 50,000 shares vesting on the second anniversary of the date of
grant.
Stock Award of 50,000 shares vesting on the third anniversary of the date of
grant.
Stock Award of 50,000 shares vesting on the fourth anniversary of the date of
grant.

Long-Term Growth Program. Based on your position, you will be eligible to
participate in the Long-Term Growth Program that rewards achievement of Gap Inc.
and/or Division financial objectives over a three year period. You will not be
eligible to participate for the current fiscal 2012-2014 performance cycle.
Provided you begin your employment prior to November 1, 2013, you are eligible
to participate in the program for the fiscal 2013-2015 performance cycle. Under
the current program, your target opportunity to earn performance shares is 100%
of your base salary. Depending on results, your actual performance shares, if
any, may be higher or lower and can reach a maximum of 300% of target shares.
Awards are made in the form of performance shares that are paid in Gap Inc.
stock upon vesting. The number of earned performance shares will be determined
no later than March 2016. Awards are subject to approval by the Committee and
the provisions of Gap Inc.’s stock plan. If the financial objectives are
achieved, the award will vest 50% on the date the Committee certifies attainment
and 50% one year from the certification date provided you are employed by Gap
Inc. on the vesting dates. Awards are subject to income tax withholding upon
payment.

You will be eligible for future Long-Term Incentive Awards on the same basis as
other senior executives of the Company. However, in light of the equity grants
above, you will not be eligible for any stock options in the March 2013 focal
review process. All the Long-Term Incentive Awards earned will be paid or become
exercisable, if applicable, in accordance with the time and form and other
provisions of the applicable award agreement and plan document.

Legal and Financial/Tax Advisor Fees. The Company will reimburse you for all
reasonable legal and tax/financial advisor fees and expenses incurred in
connection with the negotiation, preparation and execution of this letter not to
exceed $50,000 in the aggregate. The reimbursement will be made to your attorney
within 45 days of your presentation of non-privileged documentation of services
rendered. The amount of the reimbursement will be imputed as income to you upon
your Start Date.

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Stefan Larsson
April 26, 2012
Page 3

Financial Counseling Program. To help you achieve your financial goals, we
currently offer a financial counseling program through The Ayco Company, L.P., a
Goldman Sachs Company. Ayco’s financial counselors have comprehensive
information regarding Gap Inc.’s benefit and compensation plan design. You
become eligible to participate in the Ayco financial counseling program upon
your Start Date. A financial counselor from Ayco will contact you shortly after
your Start Date to provide further details of this benefit, including tax
implications.

Benefits. Gap Inc. offers a competitive benefits package that includes medical,
dental, vision, life and disability insurance. Gap Inc. also offers an Employee
Stock Purchase Plan, a 401(k) plan with a generous dollar for dollar company
match up to four percent of your pay (limited as provided in the plan), and
employee discounts toward merchandise you purchase in our stores as gifts, or
for yourself and your eligible dependents. You will be eligible for paid time
off on an “as needed” basis for vacation, illness or personal business, subject
to business needs; there is no accrual for paid time off. In addition there are
seven company-paid holidays. The Company will provide you a summary of benefit
programs.

Relocation Support. Gap Inc. will reimburse you for reasonable relocation
expenses related to your move from Stockholm, Sweden to the San Francisco,
California region in accordance with the Company’s International One-Way Move
Policy (“Move Policy”). We have also provided a Relocation Benefits Summary
(“Summary”), which is an overview of key aspects of the Move Policy and includes
any exceptions to the Move Policy that have been approved for your relocation.
In the event of any conflict between the Summary and the Move Policy, the
Summary shall prevail. You will have certain obligations to repay the Company
for relocation costs in the event of your termination. A payback agreement
provides details, and will need to be signed and returned to the Company before
any relocation benefits are provided. Should you have any questions with regard
to your relocation or require further information, please contact Global
Mobility at (415) 427-6887.

Termination/Severance prior to 18 Months following Start Date.

In the event that your employment is involuntarily terminated by the Company for
reasons other than Good Cause (as defined below in this section), or you
voluntarily terminate your employment for Good Reason (as defined below in this
section) prior to the date that is 18 months following your Start Date (“End
Date”), the Company will provide you the following after your “separation from
service” (as defined in clause (b) in the section at the end of this letter
entitled section 409A), provided you sign a general release of claims and such
form is furnished to you by no later than 7 days after the date of separation
from service and it becomes effective within 45 calendar days after such
separation from service (such 45th day, the “Release Deadline):

(1) Your then current salary, at regular pay cycle intervals, for eighteen
months commencing in the first regular pay cycle following the Release Deadline
(the “severance period”). Payments will cease if you accept other employment or
professional relationship with a competitor of the Company (defined as another
company primarily engaged in the apparel design or apparel retail business or
any retailer with apparel sales in excess of $500 million annually), or if you
breach your remaining obligations to the Company (e.g., your duty to protect
confidential information, agreement not to solicit Company employees). Payments
will be reduced by any compensation you receive (as received) during the
severance period from other employment or professional relationship with a
non-competitor.

(2) Through the end of the period in which you are receiving payments under
paragraph (1) above, if you properly elect and maintain COBRA coverage, payment
of a portion of your COBRA premium in a method as determined by the Company.
This payment shall be treated as taxable income to you and subject to tax
withholding. Notwithstanding the foregoing, the Company’s payment of the monthly
COBRA premium shall cease immediately if the Company determines in its
discretion that paying such monthly COBRA premium would result in the Company
being in violation of, or incurring any fine, penalty, or excise tax under,
applicable law (including, without limitation, any penalty imposed for violation
of the nondiscrimination requirements under the Patient Protection and
Affordable Care Act or guidance issued thereunder).

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Stefan Larsson
April 26, 2012
Page 4

(3) Through the end of the period in which you are receiving payments under
paragraph (1) above, reimbursement for your costs to maintain the same or
comparable financial counseling program the Company provides to senior
executives in effect at the time of your separation from service.

(4) Prorated Annual Bonus for the fiscal year in which the termination occurs,
on the condition that you have worked at least 3 months of the fiscal year in
which you are terminated, based on actual financial results and 100% standard
for the individual component, provided that such proration shall be on no less
favorable a basis than provided to other senior level executives. Such bonus
will paid in March of the year following termination at the time Annual Bonuses
for the year of termination are paid, but in no event, later than the 15th day
of the third month following the later of the end of the Company’s taxable year
or the end of the calendar year in which such termination occurs.

(5) Accelerated vesting (but not settlement) of restricted stock units (“RSUs”)
(excluding any RSUs with performance conditions) scheduled to vest prior to
April 1 following the fiscal year of termination, provided that such
acceleration shall be on no less favorable a basis than provided to other senior
level executives. Shares of the Company stock in settlement of any vested RSUs
under this section will be delivered on the applicable regularly scheduled
vesting dates.

The payments in (1) through (5) above are taxable income to you and are subject
to tax withholding.
The term “Good Cause” shall mean a good faith determination by the Company that
your employment be terminated for any of the following reasons: (1) your
conviction of or plea of nolo contendere to any crimes in which you are charged
with theft, fraud or moral turpitude; (2) your engaging in willful gross neglect
of duties, including willfully failing or willfully refusing to implement or
follow reasonable direction of the Company; or (3) your being in material breach
of Gap Inc.’s policies and procedures, including but not limited to applicable
provisions of the Code of Business Conduct.

The term “Good Reason” shall mean any of the following that occur without your
consent: (1) relocation of your primary work location by more than fifty (50)
miles from San Francisco; (2) any reduction in your base salary or target annual
bonus percentage opportunity; (3) your ceasing to be the sole Global President
of Old Navy; (4) your ceasing to report solely and directly to the CEO; (5) the
Company’s material breach of this letter; or (6) the failure by the Company,
following your written request to the Company’s General Counsel, to procure and
deliver to you reasonably satisfactory evidence of the assumption of this letter
by any successor. Before “Good Reason” has been deemed to have occurred, you
must give the Company written notice detailing why you believe a Good Reason
event has occurred and such notice must be provided to the Company within thirty
days of your actual knowledge of the initial occurrence of such alleged Good
Reason event. The Company shall then have thirty days after its receipt of
written notice to cure the item cited in the written notice so that “Good
Reason” will have not formally occur with respect to the event in question. If
such item is not cured by the end of such period, you must terminate your
employment within 90 days after the expiration of such cure period in order to
be treated hereunder as terminating your employment for “Good Reason.”

At any time prior to the End Date, if you voluntarily resign your employment
from Gap Inc. for other than Good Reason, or your employment is terminated for
Good Cause, you will receive no compensation, payment or benefits after your
last day of employment; provided, however you shall continue to be entitled to
receive: (i) any earned but unpaid base salary through the date of termination,
(ii) any amounts owed and due to you pursuant to the terms and conditions of the
benefit and bonus plans of Gap Inc., (iii) any expense reimbursements due to you
under applicable Gap Inc. policy and (iv) other payments and benefits, including
senior level executive benefits, if any, in accordance with applicable plans,
programs and arrangements with Gap Inc. to the extent you are eligible
(collectively referred to as “Other Payments”). Your continuing entitlements to
indemnification shall be as provided below. If your employment terminates for
any reason, you will not be entitled to any payments, benefits or compensation
other than as provided in this letter.

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Stefan Larsson
April 26, 2012
Page 5

Termination/Severance following End Date.

In the event that your employment is involuntarily terminated by the Company for
reasons other than For Cause (as defined below) after the End Date and before
February 13, 2015, the Company will provide you the following after your
Separation from Service, provided you sign a general release of claims and such
form is furnished to you by no later than 7 days after the date of your
separation from service and it becomes effective by the Release Deadline: the
compensation and benefits described in subparagraphs (1) through (3) above under
Termination/Severance prior to 18 months following Start Date at such times and
under the terms and conditions set forth in such subparagraphs, and additional
compensation or benefits, if any, as approved by the Committee that are
applicable to you, on a no less favorable basis than compensation and benefits
provided to other members of the Executive Leadership Team.

The payments in (1) through (3) above are taxable income to you and are subject
to tax withholding.

The term “For Cause” shall mean a good faith determination by the Company that
your employment be terminated for any of the following reasons: (1) indictment,
conviction or admission of any crimes involving theft, fraud or moral turpitude;
(2) engaging in gross neglect of duties, including willfully failing or refusing
to implement or follow direction of the Company; or (3) breaching Gap Inc.’s
policies and procedures, including but not limited to the Code of Business
Conduct.

At any time following the End Date, if you voluntarily resign your employment
from Gap Inc. or your employment is terminated For Cause, you will receive no
compensation, payment or benefits after your last day of employment; provided,
however you shall continue to be entitled to receive any Other Payments. If your
employment terminates for any reason, you will not be entitled to any payments,
benefits or compensation other than as provided in this letter.

Recoupment Policy. As a Global Brand President, the Company’s recoupment policy
will apply to you. Under the current policy applicable to the Company’s senior
executives, subject to the discretion and approval of the Board, the Company
will, to the extent permitted by governing law, in all appropriate cases as
determined by the Board, require reimbursement and/or cancellation of any bonus
or other incentive compensation, including stock-based compensation, awarded to
an executive officer or other member of the Company’s executive leadership team
where all of the following factors are present: (a) the award was predicated
upon the achievement of certain financial results that were subsequently the
subject of a restatement, (b) in the Board’s view, the executive engaged in
fraud or intentional misconduct that was a substantial contributing cause to the
need for the restatement, and (c) a lower award would have been made to the
executive based upon the restated financial results. In each such instance, the
Company will seek to recover the individual executive’s entire annual bonus or
award for the relevant period, plus a reasonable rate of interest.

Stock Ownership. Under Company policy, you are required to comply with certain
stock ownership requirements as determined by the Board. Under current policy,
you are required to own 75,000 shares in a permissible form of ownership within
five years of your Start Date. Detailed information on stock ownership
requirements is available at
www.gapinc.com/content/gapinc/html/investors/governance.

No Conflicts with this Offer/Representations. You represent and warrant that you
do not have any agreements, obligations, relationships or commitments to any
other person or entity that conflicts with accepting this offer or performing
your obligations of this position. You further represent that the credentials
and information you provided to Gap Inc. (or its agents) related to your
qualifications and ability to perform this position are true and correct.

Proprietary Information or Trade Secrets of Others. You agree that prior to your
first day of employment with Gap Inc. you will return all property and
confidential information, including trade secrets, belonging to all prior
employers. You further agree that you will not disclose to us, or use, or
persuade any Gap Inc. employee to use, any proprietary information or trade
secrets of another person or entity.

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Stefan Larsson
April 26, 2012
Page 6

Abide by Gap Inc. Policies/Protection of Gap Inc. Information. You agree to
abide by all Gap Inc. policies including, but not limited to, policies contained
in the Code of Business Conduct. You also agree to abide by the Confidentiality
and Non-Solicitation terms below during and after your employment with Gap Inc.

Insider Trading Policies. Based on the level of your position, you will be
subject to Gap Inc.’s Securities Law Compliance Manual, which among other things
places restrictions on your ability to buy and sell Gap Inc. stock and requires
you to pre-clear trades. This position will subject you to the requirements of
Section 16 of the United States Securities Exchange Act of 1934, as amended. In
addition, this position will result in your compensation being publicly
disclosed in accordance with United States Securities and Exchange rules. You
will receive additional information, including a copy of the Securities Law
Compliance Manual, shortly after your first day of employment. If you wish to
obtain additional information, or have questions about the compliance manual,
you may contact Gap Inc. Global Equity Administration at (415) 427-8478.

Indemnification. The Company shall indemnify you to the maximum extent permitted
by applicable law and the Company’s bylaws with respect to your employment
hereunder and you shall also be covered under a directors and officers liability
insurance policy(ies) paid for by the Company during your employment hereunder.
The Company shall maintain directors and officers liability insurance for your
benefit on terms and conditions generally applicable to the Company’s other
senior executives. The Company’s obligations under this paragraph are only for
acts and omissions by you while you are employed by the Company under the terms
of this letter but, with respect to such acts and omissions, shall survive
termination of your employment and also termination or expiration of this
letter.

Confidentiality. You acknowledge that you will be in a relationship of
confidence and trust with Gap Inc. As a result, during your employment with Gap
Inc., you will acquire “Confidential Information,” which is information (whether
in electronic or any other format) that people outside Gap Inc. never see, such
as unannounced product information or designs, business or strategic plans,
financial information and organizational charts, and other materials. For the
sake of clarity, Confidential Information shall not include information that
becomes generally known to the public or within the retail apparel industry
other than as a result of your violation of this letter.

You agree that you will keep the Confidential Information in strictest
confidence and trust. You will not, without the prior written consent of Gap
Inc.’s General Counsel, directly or indirectly use or disclose to any person or
entity any Confidential Information, during or after your employment, except as
is necessary in the ordinary course of performing your duties while employed by
Gap Inc., or if required to be disclosed by order of a court of competent
jurisdiction, administrative agency or governmental body, or by subpoena,
summons or other legal process, provided that prior to such disclosure, Gap Inc.
is given reasonable advance notice of such order and an opportunity to object to
such disclosure. Anything herein to the contrary notwithstanding, you shall be
entitled to retain the following personal items, to the extent such personal
items do not contain Confidential Information: (i) papers and other materials of
a personal nature, including, but not limited to, photographs, correspondence,
personal diaries, calendars and rolodexes, personal files and phone books, (ii)
information showing your compensation or relating to reimbursement of expenses,
(iii) information that you reasonably believe may be needed for tax purposes,
and (iv) copies of plans, programs and agreements relating to your employment,
or termination thereof, with Gap Inc.

You agree that in the event your employment terminates for any reason, you will
immediately deliver to Gap Inc. all company property, including all documents,
materials or property of any description, or any reproduction of such materials,
containing or pertaining to any Confidential Information.

Non-Solicitation of Employees. In order to protect Confidential Information, you
agree that so long as you are employed by Gap Inc., and for a period of one year
thereafter, you will not directly or indirectly, on behalf of yourself, any
other person or entity, solicit, call upon, recruit, or attempt to solicit any
of Gap Inc.’s employees or in any way encourage any Gap Inc. employee to leave
their employment with Gap Inc. For this purpose, advertisements for employment
that do not directly or indirectly identify you that are placed in newspapers of
general circulation will not be considered solicitation. Gap Inc. agrees that
(a) your responding to an unsolicited request from any former employee of Gap
Inc. for advice on general employment matters, and (b) your responding to an
unsolicited request for an employment reference regarding any former employee of
Gap Inc. by providing a general reference setting forth your personal views
about such former employee, in and of themselves, shall not be

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Stefan Larsson
April 26, 2012
Page 7

deemed a violation of this paragraph. Gap Inc. further agrees that it shall not
be a violation of this paragraph for any subsequent employer with whom you
become affiliated to hire any former employee of Gap Inc. if you are not
involved (directly or through contacts with others) in hiring or identifying
such former employee as a potential recruit or in assisting in, or counseling
others concerning, the recruitment of such former employee. You agree that
during your employment and for a period one year thereafter, you will not
directly or indirectly, on behalf of yourself, any other person or entity,
interfere or attempt to interfere with Gap Inc.’s relationship with any person
who was an employee, consultant, customer or vendor or otherwise has or had a
business relationship with Gap Inc. during the 12-month period preceding your
date of termination; provided, however, nothing in this sentence shall prevent
you from becoming employed by a company engaged in the retail clothing business
so long as you are otherwise in compliance with the terms of this letter,
including but not limited to, the Confidentiality section above.

Non-disparagement. You agree now, and after your employment with the Gap Inc.
terminates not to, directly or indirectly, disparage Gap Inc. in any way or to
make negative, derogatory or untrue statements about Gap Inc., its business
activities, or any of its directors, managers, officers, employees, affiliates,
agents or representatives to any person or entity. The foregoing shall not apply
to statements you make to members of your immediate family or your legal, tax or
financial advisors, provided that such persons must agree not to repeat such
statements and agree to be bound by this section. Notwithstanding anything
herein to the contrary, nothing in this paragraph shall prevent you from (i)
responding publicly and truthfully to statements about you by Gap Inc. or its
agents which you reasonably believe to be incorrect, disparaging or derogatory
to the extent reasonably necessary to correct or refute such statement or (ii)
making any truthful statement to the extent (A) necessary with respect to any
litigation, arbitration or mediation involving this letter, including, but not
limited to, the enforcement of this letter or (B) required by law or by any
court, arbitrator, mediator or administrative or legislative body with apparent
jurisdiction to order you to disclose or make accessible such information.

Cooperation. Following termination of your employment for any reason, you shall
reasonably cooperate with, assist and provide information to Gap Inc. concerning
any matters about which you have knowledge because of your prior employment with
Gap Inc. or your prior involvement as an officer or director of Gap Inc. Such
assistance and cooperation will be scheduled at times and locations personally
convenient for you and not inconsistent with the responsibilities you may have
with subsequent employment or rendering of services, except where such
scheduling is unreasonable or impracticable (giving the needs of both parties
equal weight) under all of the circumstances. Gap Inc. shall pay, or reimburse
you, for reasonable, out-of-pocket costs incurred by you in providing such
assistance (e.g., reasonable travel costs and reasonable legal fees).

Public Announcement of Employment. Gap Inc. will review with you before its
release any press release it issues regarding your agreement to and commencement
of employment with Gap Inc.

Section 409A. The parties hereto intend that all payments and benefits to be
made or provided to you hereunder and under any Plan (as defined in clause (g)
below) either will be exempt from, or will be paid or provided in compliance
with, all applicable requirements of Section 409A (as defined in clause (g)
below), and the provisions of this letter and of each Plan (to they extent they
relate to your entitlements under such Plan) shall be construed and administered
in accordance with such intent. In furtherance of the foregoing, the provisions
set forth below shall apply notwithstanding any other provision in this letter,
or (where applicable) any provision in any Plan, to the contrary.
Notwithstanding anything in this letter or elsewhere to the contrary, all taxes,
costs and interest imposed under Section 409A are solely your responsibility.

a) All payments to be made to you hereunder or under any Plan, to the extent
they constitute a deferral of compensation subject to the requirements of
Section 409A (after taking into account all exclusions applicable to such
payments under Section 409A), shall be made no later, and shall not be made any
earlier, than at the time or times specified herein, or in such Plan, for such
payments to be made, except as otherwise permitted or required under Section
409A.

b) The date of your "separation from service", as defined in Section 409A (and
as determined by applying the default presumptions in Treas. Reg.
§1.409A-1(h)(1)(ii)), shall be treated as the date of your termination

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Stefan Larsson
April 26, 2012
Page 8

of employment for purposes of determining the time of payment of any amount that
becomes payable to you hereunder and under any Plan upon your termination of
employment and that is properly

treated as a deferral of compensation subject to Section 409A after taking into
account all exclusions applicable to such payment under Section 409A.

c) To the extent any payment otherwise required to be made to you hereunder or
under any Plan on account of your separation from service is properly treated as
a deferral of compensation subject to Section 409A after taking into account all
exclusions applicable to such payment under Section 409A, and if you are a
"specified employee" under Section 409A at the time of your separation from
service, then such payment shall not be made prior to the first business day
after the earlier of (i) the expiration of six months from the date of your
separation from service, or (ii) the date of your death (such first business
day, the

“Delayed Payment Date”). On the Delayed Payment Date, there shall be paid to you
or, if you have died, to your estate, in a single cash lump sum, an amount equal
to the aggregate amount of all payments delayed pursuant to the preceding
sentence. All other payments not subject to such delay shall be paid in
accordance with their terms determined without regard to this subsection (c).

d) In the case of any amounts payable to you under this letter, or under any
Plan, that may be treated as payable in the form of “a series of installment
payments”, as defined in Treas. Reg. §1.409A-2(b)(2)(iii), your right to receive
such payments shall be treated as a right to receive a series of separate
payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii).

e) To the extent that the reimbursement of any expenses eligible for
reimbursement or the provision of any in-kind benefits under any provision of
this letter or under any Plan would be considered deferred compensation under
Section 409A (after taking into account all exclusions applicable to such
reimbursements and benefits under Section 409A): (i) reimbursement of any such
expense shall be made by the Company as soon as practicable after such expense
has been incurred, but in any event no later than December 31st of the year
following the year in which you incur such expense; (ii) the amount of such
expenses eligible for reimbursement, or in-kind benefits to be provided, during
any calendar year shall not affect the amount of such expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other calendar year;
and (iii) the your right to receive such reimbursements or in-kind benefits
shall not be subject to liquidation or exchange for any other benefit.

f) The parties will cooperate in good faith to the extent necessary to comply
with all applicable requirements of, and to avoid the imposition of any
additional tax, interest and penalties under, Section 409A in connection with
the benefits and payments to be provided or paid to you hereunder or under such
Plan. Without limiting the last sentence of the introductory paragraph under the
heading Section 409A (relating to your responsibility for liabilities under
Section 409A), any necessary modification of such payments or benefits to comply
with Section 409A shall maintain the original intent and economic benefit to you
of the applicable provision of this letter or such Plan (except as would
materially increase the cost thereof to the Company) to the maximum extent
possible without violating any applicable requirement of Section 409A.  Any
necessary modification to the terms of any Plan may be made by means of a
separate written agreement between the Company and you so as to limit the
applicability of such modification to just the payments or benefits to be
provided to you under such Plan.

g) For purposes of the subsections (a) through (f) above, the following terms
shall have the following meanings:

(1) “Plan” shall mean any plan, program, agreement (other than this letter) or
other arrangement maintained by the Company or any of its affiliates that is a
“nonqualified deferred compensation plan” within the meaning of Section 409A and
under which any payments or benefits are to be made or provided to you, to the
extent they constitute a deferral of compensation subject to the

--------------------------------------------------------------------------------

Stefan Larsson
April 26, 2012
Page 9

requirements of Section 409A after taking into account all exclusions applicable
to such payments under Section 409A.

(2) “Section 409A” shall mean section 409A of the Internal Revenue Code of 1986,
as amended, the regulations issued thereunder and all notices, rulings and other
guidance issued by the Internal Revenue Service interpreting same.

Employment Status. You understand that your employment is “at-will”. This means
that you do not have a contract of employment for any particular duration or
limiting the grounds for your termination in any way. You are free to resign at
any time. Similarly, Gap Inc. is free to terminate your employment at any time
for any reason. The only way your at-will status can be changed is if you enter
into an express written contract with Gap Inc. that contains the words “this is
an express contract of employment” and is signed by an officer of Gap Inc.

The Company may from time to time change its compensation and benefit programs.
In such instances, you will be eligible for such programs at a level no less
favorable than the members of the Executive Leadership Team.

The laws of the State of California shall govern the terms of this letter. In
the event of any dispute between the parties regarding this letter, each party
shall bear its, or his, own costs, including legal fees, associated with the
settlement of the dispute including costs of litigation or arbitration.

Please note that except for those agreements or plans referenced in this letter,
this letter contains the entire understanding of the parties with respect to
this offer of employment and supersedes any other agreements, representations or
understandings (whether oral or written and whether express or implied) with
respect to this offer of employment. The invalidity or unenforceability of any
provision or provisions of this letter shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect. Anything herein to the contrary notwithstanding, all provisions of
this letter necessary to carry out the intention of the parties including,
without limitation, those relating to Termination/Severance and Confidentiality,
both prior to and following the End Date, shall survive termination of your
employment and also termination or expiration of this letter.

Stefan, it is our pleasure to extend this offer. We look forward to working with
you.

Yours sincerely,

/s/ Eva Sage-Gavin
_______________________________________
Eva Sage-Gavin
Executive Vice President,
Global Human Resources & Corporate Affairs
Gap Inc.

Agreed on this 27th day of April, 2012

    
/s/ Stefan Larsson
_________________________________________
Stefan Larsson