Offer Letter dated 2/25/03



 
Exhibit 10.1

 
 
February 24, 2003 
 
 
Eva Sage-Gavin 
 
 
Dear Eva, 
 
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
those values and we are confident that you will find rewarding opportunities with us. 
 
This letter confirms our offer to you to join Gap Inc. as Executive Vice President, Human Resources. In this position you will report to Paul Pressler, Chief Executive Officer (“CEO”). This offer is contingent upon
approval by the Compensation and Management Development Committee of our Board of Directors, and successful completion of a background screen and reference check. 
 
Salary.    Your annual salary will be $475,000 payable every two weeks. You are scheduled to
receive a performance and compensation review in April 2004 based on your time in the position. 
 
Initial Bonus.    In addition to your salary, you will receive an initial bonus of $300,000 within the first thirty days of your employment. This will be processed as
supplemental income and is subject to supplemental taxes. In the event that you voluntarily terminate your employment with Gap Inc. for any reason within one year of your first day of employment, you agree to repay to Gap Inc. the full bonus amount
of $300,000 within thirty days of your last day of employment. 
 
MICAP Bonus.    Based on your position as Executive Vice President, Human Resources you will participate in the Executive Management Incentive Cash Award Program (MICAP). Your eligibility will continue so
long as you remain an executive of the Company. MICAP provides cash incentives as a reward for achieving company and individual goals. You are eligible to receive a target bonus of 65% and up to a maximum bonus of 130% of your base salary. For
fiscal year 2003 (February 2003-January 2004), your annual bonus target will be split into two payout opportunities based on six-month performance cycles. For the first bonus cycle (first and second quarters 2003), your target bonus payout
opportunity is 40% of your annual target and will be payable in the third quarter on a prorated basis, based on your start date. For the second cycle (third and fourth quarters 2003), the target payout opportunity is 60% of your annual target and
will be payable in April 2004. Your MICAP bonus for fiscal year 2003 is based on time in position, divisional or country assignment and base salary and/or incentive target and will be paid out provided you are actively employed by Gap Inc. on the
day the award is distributed and goals are met. 







 
Stock Options

 
a.    Fair Market Option
Grant.    Subject to approval by the Compensation and Management Development Committee of the Board of Directors and the provisions of the Company’s stock option plan, you will be granted options to purchase 200,000
shares of Gap Inc. common stock on the date when the options are approved by the Compensation and Management Development Committee of the Board of Directors or on the first day of employment, whichever is later (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 100% vested and exercisable as shown in the schedule below, provided you are employed with Gap Inc. on the vesting dates. 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 one year from date of grant 
Option to purchase 50,000 shares vesting two years from the date of grant 
Option to purchase 50,000 shares vesting three years from date of grant 
Option to purchase
50,000 shares vesting four years from date of grant 
 
b.    Discounted Option Grant.    Subject to approval by the Compensation and Management Development Committee of the Board of Directors and the provisions of the Company’s stock
option plan, you will be granted options to purchase 50,000 shares of Gap Inc. common stock on the date when the options are approved by the Compensation and Management Development Committee of the Board of Directors or on the first day of
employment, whichever is later (the “date of grant”). The option price will be discounted 50% from 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 with 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 12,500 shares vesting one year from date of
grant 
Option to purchase 12,500 shares vesting two years from the date of grant 
Option to purchase 12,500 shares vesting three years from date of grant 
Option to purchase
12,500 shares vesting four years from date of grant 
 
Financial
Planning Assistance.    We provide you with two choices to help you achieve your financial goals. You have the option of one on one financial counseling through our partnership with the AYCO Company. The first year of
counseling will be 100% company paid. Each year thereafter, Gap Inc. will pay 50% of the expense. As another option, Gap offers a reimbursement of $5,000 annually to be used with a financial planner of your choice. 
 
Benefits.    Gap Inc. offers a competitive benefits
package designed to help you stay healthy, assist in securing your financial future and manage your work and personal life. In addition to medical, dental, vision, life and income protection, you are eligible for Gap Inc.’s LifeStyle Benefits
that include an Employee Assistance Program and tuition reimbursement. 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 salary (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 thirty days of Paid Time Off (“PTO”) on an annual basis in addition to seven
Company-paid holidays. PTO accrues each pay period based on regular hours paid, and can be used for vacation, illness or personal business. Please refer to the Company’s benefits booklet for more information on our extensive benefits package.








 
Income
Continuation.    In the event that Gap Inc. terminates your employment involuntarily without cause before your third anniversary of employment, the Company will continue to make bi-weekly payments to you based on your then
current base salary (“Income Continuation”), according to the following schedule beginning on the day after your last active day of employment: 
 

	 	a.	 	If your employment is terminated before your first anniversary of employment, you will receive Income Continuation for 24 months; 

 

	 	b.	 	If your employment is terminated upon or after your first anniversary but before your second anniversary of employment, you will receive Income Continuation for 18
months; 

 

	 	c.	 	If your employment is terminated upon or after your second anniversary but before your third anniversary of employment, you will receive Income Continuation for 12
months; 

 

	 	d.	 	If your employment is terminated for any reason upon or after your third anniversary of your first day of employment, you will not be entitled to any Income
Continuation under this agreement. 

 
Prior to and as
a condition of receiving the Income Continuation described above, you must execute a full release of all claims arising out of your employment and termination of employment with Gap Inc. During the Income Continuation period, you agree to be
reasonably available to the Company for up to 20 hours per month as requested to respond to requests for information concerning matters, facts or events relating to the Company or any Company entity about which you may be knowledgeable.

 
If you accept new employment or establish any other professional
relationship (e.g., a consulting relationship) for which you are compensated during the applicable Income Continuation period or if you breach your remaining obligations to the Company (e.g., your duty to protect confidential information), Income
Continuation payments will cease effective on your acceptance or breach as described herein. As a condition to receiving Income Continuation, you agree to inform Gap Inc. within five days of your acceptance of new employment or other compensated
relationship. 
 
For purposes of this agreement, “cause”
shall mean termination of your employment based on a good faith determination by the CEO that your employment be terminated for any of the following reasons: (1) indictment, conviction or admission of any crime involving dishonesty or moral
turpitude; (2) participation in any act of fraud or malfeasance against Gap Inc.; (3) intentional damage to any property of Gap Inc.; (4) breach of any provision of this agreement or Gap Inc.’s Code of Business Conduct; (5) use of alcohol or
drugs which interferes with the performance of your duties under this agreement or which compromises the integrity and reputation of Gap Inc., its employees or products; or (6) absence from employment, other than a result of disability, for any
reason for a period of more that four weeks without prior consent by the Board. 
 
If you voluntarily resign your employment with Gap, Inc. at any time or your employment is terminated for cause, you will receive no compensation, payment or benefits after your last day of employment. If your employment terminates
for any reason, you will not be entitled to any payments, benefits, damages, awards or compensation other than as provided in this offer. 
 
Tax Withholding.    You acknowledge and agree that all payments made pursuant to this agreement shall be subject to withholding
of all applicable taxes. 







 
Proprietary Information or
Trade Secrets of Others.    You represent and warrant to us that: 1) you do not have any other agreements, relationships or commitments to any other person or entity that conflict with accepting this offer or performing your
obligations as outlined herein; and 2) prior to your first day of employment with Gap Inc. you will return all property and confidential information belonging to all prior employers; and 3) you will not disclose to us, or use, or persuade any other
Gap Inc. employee to use, any proprietary information or trade secrets of another person or entity. 
 
Abide by Company Policies.    You agree to abide by and comply with all applicable Gap Inc. policies including, but not limited to, those contained in the Code of Business
Conduct. 
 
Confidentiality and
Non-Solicitation.    You agree to execute and abide by the attached Confidentiality and Non-Solicitation Agreement during and after your employment with Gap Inc. 
 
Start Date and Orientation.    Your first day with
the company will be mutually agreed upon. On your first day, Katie Rosson, Senior Vice President, Human Resources will greet you. Please bring identification and proof of authorization to work in the U.S. (i.e., your driver’s license and Social
Security card, or a U.S. passport). If you have questions about documentation, contact Katie Rosson at (650) 952-4400. 
 
Other Provisions.    Please read the following, which will help you to understand the terms of your employment. By reviewing
and signing this letter, you understand that this letter and your acceptance of our offer of employment do not constitute an employment contract with the Company and 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 or precluding Gap Inc. from revoking this offer of employment at any time. You are free to resign at any time. Similarly, the Company is free to terminate
your employment at any time for any reason. The only time your at-will status could be changed is if you were to enter into an express written contract with the Company, which contains the words, “this is an express contract of
employment”, and which is signed by an officer of the Company. 
 
The above language contains our entire agreement about your employment at Gap Inc. and there are no oral or side agreements of any kind. In the event that there is any dispute over the terms, enforcement or obligations under this
agreement, the prevailing party shall be entitled to recover from the other party reasonable attorneys fees and/or costs incurred to enforce the agreement. 
 
Please review your agreement (which incorporates the Confidentiality and Non-Solicitation Agreement attached), sign one of the enclosed originals and
return the entire letter and agreement to Katie Rosson at Gap Inc.    You may keep the other original for your personal records. This offer is valid only until February 28, 2003 and may be withdrawn before your start date.

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

	 Very truly yours,
	 	 	 	 
	
	 Gap Inc.
	 	 	 	 	 	 
	
	 /s/    PAUL PRESSLER

	 	 	 	 	 	 
	 Paul Pressler
 Chief Executive Officer
	 	 	 	 	 	 

 
 

	 Confirmed this 25th day of February, 2003
	 	 	 	 
	
	 /s/    EVA SAGE GAVIN

	 	 	 	 [Omitted]


	 Eva Sage Gavin
	 	 	 	 Social Security #









 
CONFIDENTIALITY & NON-SOLICITATION AGREEMENT 
 
Eva Sage-Gavin (“Employee”) acknowledges that the services she will perform for Gap Inc. are unique and extraordinary and that she will be in a relationship of confidence and trust with Gap Inc. As a result, during
her employment with Gap Inc. she will acquire “Confidential Information” that is (1) owned or controlled by Gap Inc., (2) in the possession of Gap Inc. and belonging to third parties, and/or (3) conceived, originated, discovered or
developed in whole or in part by Employee. Confidential Information includes trade secrets and other confidential or proprietary business, technical, strategic, marketing, legal, personnel or financial information, whether or not Employee’s
work product, in written, graphic, oral or other tangible or intangible forms, including, but not limited to strategic plans, specifications, records, data, computer programs, drawings, diagrams, models, employee, vendor or customer names or lists,
business or marketing plans, studies, analyses, projections and reports, communications by or to attorneys (including attorney client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including
attorney work product), and software systems and processes. Any information that is not readily available to the public shall be considered to be a trade secret and confidential and proprietary. 
 
Employee agrees that she will keep the Confidential
Information in strictest confidence and trust, and will not, without the prior written consent of Gap’s General Counsel, directly or indirectly use or disclose to any person or entity any Confidential Information, during or after
Employee’s employment, except as is necessary in the ordinary course of performing Employee’s duties while employed by Gap Inc. 
 
Employee also agrees that in the event of her employment termination for any reason, she 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. 
 
Additionally, Employee agrees that so long as she is employed by Gap, and for a period of one year
thereafter, Employee will not, directly or indirectly, on behalf of Employee, any other person or entity, solicit, call upon, recruit, or attempt to solicit any of Gap’s employees, consultants, customers, or vendors. Employee further agrees
that she will not directly or indirectly, on behalf of Employee, any other person or entity, interfere or attempt to interfere with Gap’s relationship with any person who at any time was an employee, consultant, customer or vendor or otherwise
has or had a business relationship with Gap. 
 
ACKNOWLEDGED AND
AGREED TO THIS 25TH DAY OF FEBRUARY, 2003. 
 
 

	
	 /s/    EVA SAGE
GAVIN


	 Eva Sage Gavin