Exhibit 10.35
THE GAP, INC.
NONEMPLOYEE DIRECTOR DEFERRED
COMPENSATION PLAN
AMENDED AND RESTATED DECEMBER 9,
2003
THE GAP, INC., hereby adopts The
Gap, Inc. Nonemployee Director Deferred Compensation Plan, as
follows:
1
BACKGROUND, PURPOSE AND DURATION
1.1 Effective Date . The Plan
is effective as of August 26, 1997.
1.2 Purpose of the Plan . The
Plan is intended to increase incentive and to encourage Share
ownership on the part of directors of the Company who are employees
of neither the Company nor of any Affiliate, and to provide such
directors with the opportunity to defer compensation on a pre-tax
basis. The Plan also is intended to further the growth and
profitability of the Company.
2
DEFINITIONS
The following words and phrases
shall have the following meanings unless a different meaning is
plainly required by the context:
2.1 “ Affiliate ”
means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling,
controlled by, or under common control with the Company.
2.2 “ Board ”
means the Board of Directors of the Company.
2.3 “ Company ”
means The Gap, Inc., a Delaware corporation, or any successor
thereto.
2.4 “ Compensation
” means a Nonemployee Director’s quarterly cash
retainer for serving as a Nonemployee Director including chair fees
and attendance fees for Board and committee meetings. A
Participant’s Compensation shall not include any other type
of remuneration.
2.5 “ Director ”
means any individual who is a member of the Board.
2.6 “ Disability
” means the permanent and total disability of the
Participant, as determined by the Board in its discretion in
accordance with uniform and nondiscriminatory standards adopted by
the Board from time to time.
2.7 “ Exercise Price
” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.
2.8 “ Fair Market Value
” means the arithmetic mean of the highest and lowest quoted
per Share selling prices for Shares on the relevant date, as quoted
in the New York Stock Exchange Composite Transactions Index
published in the Wall Street Journal, or if there were no sales on
such date, the arithmetic mean of the highest and lowest quoted
selling prices on the nearest day after the relevant date, as
determined by the Committee.
2.9 “ Fiscal Quarter
” means a fiscal quarter of the Company.
2.10 “ Fiscal Year
” means the fiscal year of the Company.
2.11 “ Grant Date
” means, with respect to an Option, the date on which the
Option was granted.
2.12 “ Nonemployee
Director ” means a Director who is an employee of neither
the Company nor of any Affiliate.
2.13 “ Option ”
means an option to purchase Shares granted pursuant to Sections 5.2
and 5.3.
2.14 “ Option Agreement
” means the written agreement setting forth the terms and
provisions applicable to each Option granted under the
Plan.
2.15 “ Participant
” means a Nonemployee Director who has elected to make
Compensation deferrals under the Plan and to receive an Option in
lieu of such Compensation.
2.16 “ Plan ”
means The Gap, Inc. Nonemployee Director Deferred Compensation
Plan, as set forth in this instrument and as hereafter amended from
time to time.
2.17 “ Retirement
” means termination of service on the Board on account of
retirement pursuant to The Gap, Inc. Nonemployee Director
Retirement Plan.
2.18 “ Rule 16b-3
” means Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended, and any future regulation amending,
supplementing or superseding such regulation.
2.19 “ Shares ”
means the shares of the Company’s common stock, $0.05 par
value.
2.20 “ Termination of
Service ” means a cessation of the Participant’s
service on the Board for any reason.
3
ADMINISTRATION
3.1 Authority of the Board .
The Plan shall be administered by the Board. It shall be the duty
of the Board to administer the Plan in accordance with the
Plan’s provisions. The Board shall have all powers and
discretion necessary or appropriate to administer the Plan and to
control its operation, including, but not limited to, the power to
(a) interpret the Plan and the Options, (b) adopt rules for the
administration, interpretation and application of the Plan as are
consistent therewith, (c) interpret, amend or revoke any such
rules, and (d) adopt such procedures and subplans as are necessary
or appropriate to permit participation in the Plan by Nonemployee
Directors who are foreign nationals or employed outside of the
United States.
3.2 Delegation by the Board .
The Board, in its sole discretion and on such terms and conditions
as it may provide, may delegate all or any part of its authority
and powers under the Plan to one or more Directors or officers of
the Company; provided, however, that the Board may not delegate its
authority and powers in any way which would jeopardize the
Plan’s qualification under Rule 16b-3.
3.3 Decisions Binding . All
determinations and decisions made by the Board, and any delegate of
the Board pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the
maximum deference permitted by law.
4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares .
Subject to adjustment as provided in Section 4.3, the total number
of Shares available for grant under the Plan shall not exceed
675,000. Shares issued under the Plan shall be treasury Shares
only.
4.2 Lapsed Options . If an
Option terminates, expires, or lapses for any reason, any Shares
subject to such Option again shall be available to be the subject
of an Option.
2
4.3 Adjustments in Options and
Authorized Shares . In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Board
shall adjust the number and class of Shares which may be delivered
under the Plan, and the number, class, and Exercise Price of Shares
subject to outstanding Options, as the Board (in its sole
discretion) shall determine to be appropriate to prevent the
dilution or diminution of such Options. Beginning October 28, 1998
any such adjustments by stock dividend or split-up shall not apply
to the future grants provided by Section 5. Notwithstanding the
preceding, the number of Shares subject to any Option always shall
be a whole number.
5
COMPENSATION DEFERRALS AND OPTIONS
5.1 Elections by Nonemployee
Directors . Each Nonemployee Director’s decision to
become a Participant shall be entirely voluntary.
5.1.1 Current Nonemployee
Directors . A Nonemployee Director who is such on August 26,
1997, may elect to become a Participant in the Plan by electing, no
later than October 31, 1997, to defer receipt of all of his or her
Compensation in exchange for an Option. An election under this
Section 5.1.1 to make Compensation deferrals shall be effective for
the remainder of the 1997 Fiscal Year (beginning with the quarterly
payment that would be made for and in the fourth quarter ending
January 31, 1998) and for each succeeding Fiscal Year, until
changed by the Nonemployee Director in accordance with such
procedures as the Board (in its discretion) may specify from time
to time.
5.1.2 New Nonemployee
Directors . A Nonemployee Director who first becomes such after
August 26, 1997, may elect to become a Participant in the Plan by
electing, within thirty (30) days of the date on which he or she
first becomes a Nonemployee Director, to defer receipt of all of
his or her Compensation in exchange for an Option. An election
under this Section 5.1.2 to make Compensation deferrals shall be
effective for the remainder of the Fiscal Year in which the
election is made and for each succeeding Fiscal Year, until changed
by the Nonemployee Director in accordance with such procedures as
the Board (in its discretion) may specify from time to
time.
5.1.3 Timing and Form of
Elections . Notwithstanding any contrary provision of the Plan,
the Board (in its sole discretion) shall de
