Document:

Exhibit 10.2

Independent Contractor Agreement

 

This INDEPENDENT CONTRACTOR
Agreement (this “Agreement”) is made and entered into this 16th
day of March, 2020, by and between Broadmark Realty Capital Inc. (“Company”), a Maryland corporation and Adam
Fountain (“Contractor”).

 

WHEREAS, the Company
and the Contractor previously entered into that certain Employment Agreement dated as of August 9, 2019, pursuant to which
the Contractor provided services as the Executive Vice President of the Company (the “Employment Agreement”);

 

WHEREAS, the Contractor
has provided written notice of his intent to resign and thereby terminate his employment relationship with the Company effective
as of March 31, 2020 (the “Employment Termination Date”); and

 

WHEREAS, following
the Employment Termination Date, the Contractor has agreed to provide the Company part-time transitional services in exchange for
compensation at a set hourly rate and a cash bonus opportunity.

 

NOW, THEREFORE,
in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.            Services.
Effective as of April 1, 2020, the Company hereby engages Contractor to provide marketing services to Broadmark Private REIT
Management, LLC (the “Manager”), as manager of the newly launched Broadmark Private REIT, LLC (the “Private
REIT”) as requested by the Company from time to time (the “Services”). Contractor accepts the engagement,
and agrees to deliver the Services in the most professional, complete, expeditious, and economical manner consistent with the Company’s
interests and to devote the time and effort necessary to perform the Services in such manner. Contractor agrees to comply with
all applicable Company policies while providing the Services during the Term. During the Term, Contractor further agrees to maintain
his FINRA Series 7 and 63 licenses as an “associated person” of Herald Investment Marketing, LLC (“HIM”)
in accordance with applicable securities laws and regulations and HIM’s Registered Representative Compliance and Supervisory
Procedures Manual, and to assist the Manager in marketing the Private REIT’s units to those individuals and institutions
that Contractor reasonably believes are qualified purchasers (as defined in the Investment Company Act of 1940, as amended) who
meet the standards set forth under the Private REIT’s offering documents and applicable federal laws. During the Term, Company
maintains the discretion to limit the number of hours per week during which Contractor delivers the Services.

 

    

     

    

 

2.           Term.
The term of the independent contractor relationship as described in this Agreement (the “Term”) shall begin
as of April 1, 2020 and shall continue until December 31, 2020 unless this Agreement is terminated earlier by either
party providing advanced written notice to the other (a “Termination Notice”), which Termination Notice shall
be delivered at least 30 calendar days before the effective date of termination set forth in the Termination Notice (the “Termination
Date”) or immediately for Cause by the Company. If either the Company or Contractor delivers a Termination Notice, then
the Company, in its sole discretion, may direct Contractor to cease providing the Services at any time prior to the Termination
Date, provided that the Company pays Contractor any unpaid fees earned through such time. The term “Cause” shall
mean:

 

A.            Any
act of fraud, embezzlement, theft, intentional dishonesty, misrepresentation, or breach of duty with respect to the Company or
any of its subsidiaries;

 

B.            Contractor’s
gross negligence or willful misconduct in the performance of duties to the Company;

 

C.            Deliberate
and continual refusal to perform the Services described herein;

 

D.           Any
breach of a restrictive covenant as set forth in the Separation and Release Agreement dated
March 16, 2020, by and between the Company and Contractor or any material written policy applicable to independent
contractors of the Company;

 

E.            Conviction
of, indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime
involving an act of moral turpitude or any “disqualifying event” occurs with respect to Contractor as that term is
defined in Rule 506 of SEC Regulation D such that the Company or the Private REIT would be prohibited from using Rule 506
as a safe harbor for the offering of its units on a private placement basis;

 

F.            Any
conduct which the Company reasonably believes will cause irreparable harm to the relationships between the Company and its investors,
business partners, or employees;

 

G.            Any
false or misleading statement of a material fact relating to the Company, the Manager or the Private REIT or other action by the
Contractor that materially increases the expenses of the Company in connection with the offering of units in the Private REIT or
materially delays the acceptance of subscriptions for interests in the Private REIT in compliance with applicable laws; or

 

H.           Contractor
is no longer licensed as an associated person of HIM or another SEC-registered broker-dealer and FINRA member acceptable to the
Company.

 

3.            Fees.

 

A.            Hourly
Fee. The Company will pay the Contractor for Services provided at the rate of $200 per hour. The Company’s obligation
to pay the Contractor is conditioned on the Contractor’s timely submission of the hours worked per week, in a manner and
form as reasonably acceptable to the Company in its sole discretion. Payments for Services under this Agreement shall be made no
less frequently than the Company’s regular payroll schedule.

 

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B.            Cash
Bonus Opportunity. The Company will pay the Contractor a cash bonus of two hundred and fifty thousand dollars ($250,000) (the
 “Bonus”) upon the earliest occurrence of any of the following events, subject to the Contractor continuing to
perform the Services under this Agreement through the date of such triggering event:

 

		(1)	Aggregate assets under management by the Manager or executed and valid subscription agreements
from qualified purchasers received by the Private REIT, equal or exceed $60 million since inception of the Private REIT (excluding,
for the avoidance of doubt, units purchased by the Company or its subsidiaries);

 

		(2)	The Company and the Private REIT are not subject to any law, regulation
or legal proceeding that would restrict their ability to offer units or raise capital through the Private REIT and the Company
(i) abandons the proposed offering of units through the Private REIT; (ii) receives executed, valid subscriptions from
qualified purchasers for at least $60 million of Private REIT units prior to December 31, 2020 that have not been revoked
and elects not to accept subscriptions of at least $60 million by December 31, 2020; or (iii) makes a business decision
that the Private REIT will not solicit or accept new contributions of at least $60 million prior to December 31,
2020.

 

		(3)	The Company terminates the independent contractor relationship with the Contractor without Cause
prior to December 31, 2020.

 

Whether an event constitutes a payment
trigger of the Bonus will be determined by the Company, in its sole discretion. Payment of the Bonus shall be made as soon as practicable
following the applicable triggering event, but no later than March 15th of the calendar year following the calendar year in
which the triggering event occurs.

 

C.            COBRA
Reimbursement. If Contractor is eligible for and timely elects continuation of health insurance benefits for himself and his
eligible dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then the
Company will reimburse the Contractor for COBRA premiums for the first nine (9) months of COBRA coverage such that the coverage,
if elected, will terminate upon the earliest occurrence of any of the following events:

 

		(1)	December 31, 2020;

 

		(2)	Contractor becomes employed with another employer and is eligible to receive health insurance benefits under another employer-provided
plan; or

 

		(3)	The Company terminates the independent contractor relationship with the Contractor for Cause.

 

Such continued group medical and dental plan coverage is contingent
on Contractor (i) timely electing and remaining eligible for continued coverage under COBRA and (ii) timely submitting
his COBRA premium payments for each month. Contractor may be subject to federal and state tax on the value of these reimbursements.

 

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D.            Expense
Reimbursement. The Company will be responsible for any reasonable and necessary out-of-pocket expenses incurred by Contractor
during the Term that are directly related to the provision of the Services in accordance with the Company’s standard expense
reimbursement policies applicable to independent contractors, provided that (i) the incurrence of such expenses are approved
in advance by the Company and (ii) appropriate documentation for such expenses is submitted to the Company within thirty (30)
days after the expenses are incurred.

 

E.            Technology.
The Contractor may continue to use his Company-provided email address and cellular telephone for the duration of the Term. Upon
the termination of this Agreement, Contractor may elect to retain his cellular telephone number.

 

4.            Other
Activities. During the Term, the Contractor may be otherwise engaged, employed or concerned in any other business, trade, profession
or other activity that does not negatively affect Contractor’s ability to provide the Services in accordance with this Agreement,
place the Contractor in a conflict of interest with the Company, or violate any existing restrictive covenant entered into with
the Company or its affiliates.

 

5.            Independent
Contractor Status. During the Term, Contractor at all times shall be and act solely as an independent contractor, not as an
employee of the Company. Nothing in this Agreement or the relationship between Contractor and the Company shall operate or be construed
as creating the relationship of employer/employee, agent, partners, joint ventures, or any other relationship whatsoever between
Contractor and the Company other than an independent contractor relationship. Contractor shall have no authority to, and shall
not: (i) act as an agent of the Company; (ii) contractually bind or obligate the Company in any way; (iii) hold
himself out as an employee of the Company or as having the authority to contractually bind or obligate the Company; or (iv) provide
any services to or on behalf of the Company other than pursuant to this Agreement. The parties to this Agreement agree that as
of March 31, 2020 the Contractor shall not be eligible to continue enrollment or elect to enroll in any employee benefit plan
or other compensatory program administered by, contributed to, or sponsored by the Company or any of its affiliates other than
COBRA continuation coverage.

 

6.            Withholding.
Contractor agrees that: (i) the Company shall not make any withholdings for any income, social security, or other taxes from
any monies being paid to Contractor pursuant to this Agreement; (ii) the Company shall report to the appropriate government
authorities on the appropriate Form 1099 all monies paid to Contractor pursuant to this Agreement; (iii) Contractor shall
have sole and exclusive responsibility for the payment of any and all federal, state, and local income, social security, and other
taxes arising out of any monies paid to Contractor pursuant to this Agreement; and (iv) Contractor indemnifies and holds harmless
the Company from and against all claims, damages, liabilities, demands, causes of action, costs, and expenses, including, but not
limited to, reasonable attorneys’ fees incurred by the Company, and interest and penalties arising out of or in connection
with the payment or nonpayment of any taxes relating to any monies paid to Contractor pursuant to this Agreement.

 

7.            Indemnification.
Contractor shall indemnify, defend, and hold harmless the Company and all of its direct and indirect stockholders, subsidiaries,
divisions, affiliates, successors, assigns, officers, directors, employees, insurers, funds, agents, investors, and representatives,
and the heirs, executors, administrators, receivers, successors, and assigns of all of the foregoing, from and against any and
all claims, damages, losses, judgments, liens, penalties, interest, and expenses, including but not limited to attorneys’
fees, arising or alleged to arise or resulting from: (i) Contractor’s performance or failure to perform any obligations
under this Agreement; (ii) the inaccuracy of any representations or warranties of the Contractor contained herein; (iii) the
breach of this Agreement by Contractor; (iv) any act, error, or omission of Contractor in performing the Services; and (v) the
payment or non-payment of any taxes relating to any monies paid to Contractor pursuant to this Agreement. The foregoing provisions
and all other liabilities of Contractor hereunder, shall survive the termination of this Agreement for any reason.

 

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8.            Representations
and Warranties. Contractor represents and warrants to the Company that: (i) this Agreement does not violate any other
agreement to which Contractor is a party; (ii) Contractor has had an opportunity to review the Agreement and consult with
legal and other professional counsel and advisors before executing and delivering it to the Company; (iii) this Agreement
constitutes Contractor’s valid and binding agreement, enforceable in accordance with its terms; and (iv) Contractor
will comply with all federal, state, and local laws regarding the performance of the Services and with all policies and procedures
set forth in the applicable Company policies.

 

9.            Acknowledgments.

 

B.            A.
Contractor acknowledges and agrees that as a result and as part of Contractor’s engagement with the Company, he has received
and will receive knowledge and expertise in the Business of the Company that is special and unique. As used in this Agreement,
the term “Business” shall mean the business of originating mortgages, lending money or other financing, in each
case, for the purpose of acquiring, developing or otherwise financing real estate and related assets or the operation of a real
estate investment fund or such other fund, real estate investment trust or other entity that participates in the foregoing described
real estate-related activities within the United States, whether through origination activities or in the secondary market (including,
without limitation, through the acquisition of real estate related loans or interests therein).For purposes of this Agreement,
the term “Confidential Information” means any confidential or proprietary information of the Company, which
is not already or does not become generally available to the public (but not through any breach of confidentiality by Contractor),
whether contained in documents, electronic media or other forms, including, but not limited to, information about materials, procedures,
inventions, processes, manufacturing, expertise, customer lists, potential customer lists, customer data, financial data, vendors,
marketing plans, and trade secrets. Confidential Information shall also include personal information of the Company’s customers,
clients, employees, and vendors (“Personal Information”).

 

C.            Contractor
acknowledges and agrees that the restrictive covenants and other continuing obligations in this Agreement are reasonable and necessary
and that consideration and compensation provided to Contractor pursuant to this Agreement constitute good and sufficient consideration
for Contractor’s agreements and covenants in Paragraphs 10, 11 and 12.

 

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D.            For
purposes of Paragraphs 10 through 13, the term “Company” includes both the Company and its direct and indirect subsidiaries.

 

10.          Nondisclosure
and Nonuse of Confidential Information; Nondisparagement.

 

A.            Contractor
acknowledges and agrees that he will be afforded access to Confidential Information that could have an adverse effect on the Company
and its Business if it is used in an unauthorized manner and/or disclosed. Contractor will not, at any time, either during the
Term or thereafter, disclose or use any Confidential Information, or permit any person to use, examine or make copies of any Confidential
Information, except as may be required in his duties on behalf of the Company. Contractor agrees to take reasonable measures to
protect the secrecy of, and avoid the disclosure and the unauthorized use of, any Confidential Information.

 

B.            Contractor
shall deliver to the Company at the termination of the Term, or at any time the Company may request, all memoranda, notes, plans,
records, reports, files, electronic data, computer tapes, software and other documents and data (and copies thereof) that is Confidential
Information or Personal Information or Work Product (each as defined herein) or other information relating to the Business of the
Company which Contractor may then possess or have under his control. Notwithstanding the foregoing, Contractor will have the right
to retain and remove all personal property and effects which are owned by Contractor.

 

C.            Contractor
agrees that he will not view or access any Personal Information except as needed in the course of his duties and responsibilities
for the Company.

 

D.            Contractor
agrees not to make, or cause any other person to make, any public statement that criticizes or disparages the Company, executive
officers, employees, directors or products. Nothing set forth herein shall be interpreted to prohibit Contractor from responding
publicly to incorrect public statements, making truthful statements when required by law, subpoena, court order, or the like and/or
from responding to any inquiry about this Agreement or its underlying facts and circumstances by any regulatory or investigatory
organization and/or from making any truthful statements in the course of any litigation.

 

E.            Pursuant
to 18 U.S.C. § 1833(b), Contractor will not be held criminally or civilly liable under any federal or state trade secret law
for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local
government official, either directly or indirectly, or to Contractor’s attorney and (B) solely for the purpose of reporting
or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in
a lawsuit or other proceeding. If Contractor files a lawsuit for retaliation by the Company for reporting a suspected violation
of law, Contractor may disclose the trade secret to Contractor’s attorney and use the trade secret information in the court
proceeding, if Contractor files any document containing the trade secret under seal and does not disclose the trade secret except
under court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for
disclosures of trade secrets that are expressly allowed by such section.

 

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11.          Inventions
and Patents. Contractor agrees that all inventions, innovations, improvements, technical information, certifications, systems,
software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar
or related information (whether patentable or unpatentable) which relates to the Company’s (or any predecessor’s) Business,
research and development or existing or future products or services and which are conceived, developed or made by Contractor (whether
or not during usual business hours and whether or not alone or in-conjunction with any other person) in the course of his engagement
with the Company or relationship with the Company or any predecessor, together with all patent applications, letters patent, trademark,
trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any
of the foregoing (collectively referred to herein as “Work Product”) belong to the Company. Contractor hereby
assigns and agrees to assign to the Company any rights he may have or acquire in such Work Product, whether created before, on,
after or prior to the effective date of this Agreement. Contractor agrees that his copyrightable works prepared for the Company
are “supplementary works” or “works for hire,” as defined in Title 17 of the United States Code, and if
any such works are deemed not to be a supplementary work or work for hire, then Contractor hereby assigns and agrees to assign
his entire right, title and interest in the copyright to such works to the Company. Contractor will take reasonable steps to promptly
disclose such Work Product to the Company and perform all actions reasonably requested by the Company (whether during or after
the Term) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney
and other instruments) and to provide reasonable assistance to the Company in connection with the prosecution of any applications
for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating
to any Work Product, to the extent the assistance of Contractor is reasonably required to prosecute such applications or reissues
thereof or to prosecute or defend such interferences.

 

12.          Non-Competition
and Non-Solicitation.

 

A.            Contractor
acknowledges that, in the course of his independent contractor relationship with the Company he will become familiar with the Company’s
and its respective predecessors’ trade secrets and with other Confidential Information concerning the Company and its respective
predecessors and that his services have been and will be of special, unique and extraordinary value to the Company. Contractor
agrees that, in consideration of his engagement as contemplated under this Agreement and all compensation and benefits being provided
herein, it is both reasonable and fair as well as necessary for the protection of the Company’s confidential information,
good will in the marketplace, and other protectable business interests, that he be subject to certain limitations in his activities
in the event of this Agreement’s termination by either party for any reason.

 

B.            Therefore,
in consideration of the foregoing, Contractor agrees that, for a period of eighteen (18) months following termination of his independent
contractor relationship for any reason, he will not (i) engage in, sell or provide any products or services which are the
same as or similar to or otherwise competitive with the products and services sold or provided by the Company; (ii) own, acquire,
or control any interest, financial or otherwise, in any entity or business engaged in selling or providing the same, similar or
otherwise competitive services or products which the Company is selling or providing in connection with the Business; (iii) call
on or solicit which may interfere with or impair the relationship between the Company and any current or prospective customer,
supplier, distributor, developer, service provider or other material business relation of the Company in connection with the Business;
and (iv) act or provide services as a consultant or advisor or loan or otherwise provide financing or financial assistance
of any kind, to any third party who is or is attempting, directly or indirectly, to engage in any of the activities listed in subsections
(i) through (iii) above; provided that nothing in this Subsection (B) shall prohibit Contractor from owning less
than five percent (5%) of the outstanding shares of any public company as long as Contractor has no other role with such company.

 

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C.            In
addition, in consideration of the foregoing, Contractor agrees that, for a period of twelve (12) months following any termination
of his independent contractor relationship, Contractor shall not, directly or indirectly, through another person or entity (i) induce,
attempt to induce, or solicit any employee of the Company to terminate his employment with the Company, or in any way interfere
with the relationship between the Company, on the one hand, and any employee thereof, on the other hand, (ii) employ, hire,
induce, attempt to induce, or solicit the employment of any former employee of the Company until one (1) year after such employee’s
independent contractor relationship with the Company has been terminated, (iii) call on, solicit, service, divert or take
away or attempt to call on, solicit, service, divert or take away any customer, supplier, contractor, designer, licensee or other
business relation of the Company with respect to products or services related to the Company’s Business as of the date of
this Agreement’s termination or induce any of such parties to cease doing business with the Company, or in any way interfere
with the relationship between any such customer, supplier, contractor, designer, licensee or business relation, on the one hand,
and the Company, on the other hand, or (iv) make any statement or do any act to impair, prejudice or destroy the goodwill
of the Company, to prejudice or impair the relationship or dealing between the Company and any of its customers, suppliers, contractors,
designers, licensees, employees or other business relations, or to cause existing or potential customers of the Company to make
use of the services or purchase the services or products of any competitive business.

 

13.          Enforcement.

 

A.            If
Contractor breaches or threatens to commit a breach of any of the covenants set forth in Paragraphs 10, 11 and 12 above, then the
Company shall have the right to seek to have the covenants in Paragraphs 10, 11 and 12 specifically enforced against Contractor,
including temporary restraining orders and injunctions by any court of competent jurisdiction, in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other security), it being agreed by Contractor that any breach
or threatened breach by Contractor of Paragraphs 10, 11 and 12 would cause irreparable injury to the Company and that money damages
would not provide an adequate remedy to the Company. The prevailing party is entitled to its attorneys’ fees and costs incurred
in relation to any action addressing Paragraphs 10, 11 and 12 of this Agreement. In addition, the Company shall not be required
to post any bond or other surety as a condition to the issuance of any temporary restraining order or injunction, and Contractor
irrevocably waives any such requirement of any statute or applicable law.

 

B.            If,
during the enforcement of any or all of the covenants and provisions set forth in Paragraphs 10, 11 and 12 above, any court of
competent jurisdiction enters a final judgment that declares that the duration, scope, or area restrictions stated therein are
unreasonable under circumstances then existing, are invalid, or are otherwise unenforceable, then the parties hereto agree that
the maximum enforceable duration, scope, or area reasonable under such circumstances shall be substituted for the stated duration,
scope, or area, and that the court making the determination of invalidity or unenforceability shall have the power to revise the
scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and that comes the closest to expressing the intention
of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified to cover the maximum
duration, scope, or area permitted by law.

 

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C.            If
any of the provisions of Paragraphs 10, 11 and 12 are violated, then the time limitations set forth in those sections shall be
extended for a period of time equal to the period of time during which such breach occurs, and, in the event the Company is required
to seek relief from such breach before any court, board or other tribunal, then the time limitation shall be extended for a period
of time equal to the pendency of such proceedings, including all appeals.

 

14.          Miscellaneous.

 

A.            This
Agreement shall be governed by and construed in accordance with the laws of the State of Washington, without giving effect to the
conflict of law principles thereof. Any action or proceeding by either of the parties to enforce this Agreement shall be brought
in any state or federal court located in the State of Washington. The parties hereby irrevocably submit to the non-exclusive jurisdiction
of these courts and waive the defense of inconvenient forum to the maintenance of any action or proceeding in such venue.

 

B.            This
Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any and
all prior agreements, written and oral, with respect thereto including the Employment Agreement; provided, however, the parties
agree that Sections 5 through 12 of the Employment Agreement survive and Contractor remains subject to the restrictive covenants
set forth therein. No change, amendment, or modification of any provision of this Agreement shall be valid unless set forth in
a written instrument signed by both parties.

 

C.            This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original and together which shall constitute
one and the same instrument.

 

D.            This
Agreement may not be assigned by Contractor, and the duties or obligations of Contractor may not be delegated by Contractor. Any
purported assignment or delegation without such consent shall be void and of no effect. Subject to the foregoing provisions of
this Paragraph 14, all of the covenants, conditions, and obligations contained in this Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company or the Contractor.

 

E.            Each
provision of this Agreement shall be considered severable and if, for any reason, any provision hereof is determined to be invalid
and contrary to, or in conflict with, any existing or future law or regulation of any court or agency having valid jurisdiction,
such invalid provisions shall be deemed not to be a part of this Agreement, and the remaining provisions shall continue to be given
full force and effect and bind the parties hereto.

 

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F.            Paragraphs
7 and 10 through 14 of this Agreement shall survive the expiration or termination of this Agreement.

 

G.           The
failure of either party to exercise any right or remedy provided for herein shall not be deemed a waiver of any right or remedy
hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on the dates set forth below.

 

	 	Company:
	 	 
	 	BROADMARK REALTY CAPITAL INC.
	 	 
	 	By:	/s/ Jeffrey B. Pyatt
	 	Name:	 Jeffrey B. Pyatt
	 	Title:	 Chief Executive Officer
	 	 	 
	 	Contractor:
	 	 
	 	/s/ Adam Fountain
	 	Name:	 Adam Fountain

 

[Signature
Page to Independent Contractor Agreement]Exhibit

Exhibit 4.4

DESCRIPTION OF REGISTRANT'S SECURITIES 
REGISTERED PURSUANT TO SECTION 12 OF 
THE SECURITIES EXCHANGE ACT OF 1934

The Gap, Inc. ("Gap", the "Company," "our" and "us") has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock. The following summary of the terms of our common stock is based upon our Amended and Restated Certificate of Incorporation ("Certificate of Incorporation") and our Amended and Restated Bylaws ("Bylaws"). This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the applicable provisions of our Certificate of Incorporation and our Bylaws, which are filed as exhibits to our Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of the Delaware General Corporation Law (the “DGCL”) for more information.

DESCRIPTION OF COMMON STOCK

Authorized Capital Shares

Our Certificate of Incorporation authorizes the issuance of 2,300,000,000 shares of common stock and 30,000,000 shares of preferred stock. All outstanding shares of our common stock are fully paid and nonassessable. As of March 17, 2020, no shares of preferred stock are issued or outstanding.

In addition, our Certificate of Incorporation authorizes the issuance of 60,000,000 shares of Class B common stock, which is convertible into shares of common stock on a share-for-share basis. Transfer of the shares of Class B common stock is restricted. In addition, the holders of the Class B common stock have six votes per share on most matters and are entitled to a lower cash dividend. As of March 17, 2020, no shares of Class B common stock are issued or outstanding, and we are not permitted to issue shares of Class B common stock as long as our common stock is listed under the New York Stock Exchange.

Voting Rights

Except as otherwise provided by law, holders of our common stock have voting rights on the basis of one vote per share on each matter submitted to a vote at a meeting of stockholders, subject to any class or series voting rights of holders of our preferred stock. Our stockholders may not cumulate votes in elections of directors. As a result, the holders of our common stock and (if issued) preferred stock entitled to exercise more than 50% of the voting rights in an election of directors can elect all of the directors to be elected if they choose to do so. In such event, the holders of the remaining common stock and preferred stock voting for the election of directors will not be able to elect any persons to the board of directors.

Dividend Rights

Holders of our common stock, subject to any prior rights or preferences of preferred stock outstanding, have equal rights to receive dividends if and when declared by our board of directors out of funds legally available therefor.

Liquidation Rights

In the event of our liquidation, dissolution or winding up and after payment of all prior claims, holders of our common stock would be entitled to receive any of our remaining assets, subject to any preferential rights of holders of outstanding shares of preferred stock.

Other Rights and Preferences

Holders of our common stock have no preemptive rights to subscribe for additional shares of common stock or any of our other securities, nor do holders of our common stock have any redemption or conversion rights.

Listing

Our common stock is listed on the New York Stock Exchange under the symbol "GPS."

Transfer Agent

1

The transfer agent and registrar for our common stock is Equiniti Trust Company.

Effect of Certain Provisions of Our Certificate of Incorporation and Bylaws and the Delaware Anti-Takeover Statute

Certain of the provisions of our Certificate of Incorporation, Bylaws and the DGCL could discourage a proxy contest or the acquisition of control of a substantial block of our stock. These provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of Gap, even though an attempt to obtain control of Gap might be beneficial to Gap and its stockholders.

Preferred Stock

As noted above, the rights, preferences and privileges of holders of common stock may be affected by the rights, preferences and privileges granted to holders of preferred stock. 

Pursuant to our Certificate of Incorporation, our Board of Directors has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series, and to fix the rights, preferences and privileges of each series, which may be greater than the rights of the common stock. It is not possible to state the actual effect of the issuance of any additional series of preferred stock upon the rights of holders of our common stock until the Board of Directors determines the specific rights of the holders of that series. However, the effects might include, among other things:

		
	•
	Restricting dividends on the common stock;

		
	•
	Diluting the voting power of the common stock;

		
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	Impairing the liquidation rights of the common stock; or

		
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	Delaying or preventing a change in control of Gap without further action by the stockholders.

Charter and Bylaw Provisions

Our Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election of directors, other than nominations made by or at the direction of our Board of Directors.

Our Bylaws include an exclusive forum provision. This provision provides that, unless Gap consents in writing to the selection of an alternative forum, the sole and exclusive forum for certain actions or proceedings involving us shall be the Court of Chancery of the State of Delaware. Such suits will include (1) any derivative action or proceeding brought on behalf of Gap, (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of Gap to company or its stockholders, (3) any action or proceeding asserting a claim against Gap arising pursuant to any provision of the DGCL, the Certificate of Incorporation or the Bylaws or (4) any action or proceeding asserting a claim against Gap governed by the internal affairs doctrine.

Certain Transactions

Under Delaware law, the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or bylaws, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Certain provisions of our Certificate of Incorporation related to business combinations may only be amended by an affirmative vote of the holders of 66-2/3% or more of the outstanding voting stock.

Our Certificate of Incorporation provides that business combinations with interested stockholders will require the supermajority vote of 66-2/3% of the voting power of all classes of Gap's voting stock, voting together as a single class (with each share of Class B common stock having two votes per share), to approve such transaction.

An "interested stockholder" is defined in our Certificate of Incorporation as a person (other than our subsidiaries) who or which:

		
	•
	Is the beneficial owner of more than 5% of the voting power of (a) all outstanding shares of common stock, (b) all outstanding shares of Class B common stock or (c) all outstanding shares with voting rights;

2

		
	•
	Is our affiliate and at any time within the two-year period before the date in question owned or was the beneficial owner of more than 5% of the voting power of (a) all outstanding shares of common stock, (b) all outstanding shares of Class B common stock or (c) all outstanding shares with voting rights; or

		
	•
	Is an assignee of or has otherwise succeeded to (by means other than through a public offering) any shares of our stock with voting rights which were owned by an interested stockholder at any time in the preceding two years.

A "business combination" is defined in our Certificate of Incorporation to mean:

		
	•
	A merger or consolidation of us or any of our subsidiaries with an interested stockholder;

		
	•
	A merger or consolidation of us or any of our subsidiaries with another corporation which, after such merger or consolidation, would be an affiliate of an interested stockholder;

		
	•
	A sale, lease, exchange, mortgage, pledge, transfer or other disposition of our property or the property of any of our subsidiaries representing 5% or more of our overall book value to an interested stockholder or an affiliate thereof, or the issuance or transfer by us to an interested stockholder or an affiliate thereof of our securities, or the securities of any of our subsidiaries, in exchange for cash, securities or other property having such fair market value; or

		
	•
	Any recapitalization or reclassification of our securities, or any merger or consolidation, that has the effect of increasing the voting power of an interested stockholder.

A business combination will not need to receive the supermajority vote described above if it meets one of the following tests:

		
	•
	The business combination is approved by a majority of the members of the Board of Directors who are not affiliated with the interested stockholder and who were Board members prior to the interested stockholder becoming an interested stockholder or who were recommended by a majority of such Board members; or

		
	•
	The consideration to be paid by the interested stockholder in the business combination meets various tests designed to ensure that the form and amount of consideration to be paid by the interested stockholder is fair to the other stockholders.

Delaware Anti-Takeover Statute

We are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

		
	•
	before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

		
	•
	upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

		
	•
	on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines "business combination" to include the following:

		
	•
	any merger or consolidation involving the corporation and the interested stockholder;

3

		
	•
	any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of either the assets or outstanding stock of the corporation involving the interested stockholder;

		
	•
	subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

		
	•
	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

		
	•
	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.

In general, Section 203 defines "interested stockholder" as an entity or person who, together with affiliates and associates, beneficially owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
 

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