Document 
November 30, 2023
Eric Chan
Dear Eric,
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.
This letter sets forth our offer to you to join Gap Inc. as Executive Vice President, Chief Business and Strategy Officer, Gap Inc. In this position, you will report to Richard Dickson, President & CEO, Gap Inc. This position is based in San Francisco, and it is expected that you will relocate to the San Francisco area within 12 months of your hire date. Although we encourage you to relocate as soon as practically possible, if you are unable or unwilling to relocate within your first 12 months in role, we will consider you to have resigned your employment. Prior to your relocation, you will be expected to travel to Gap Inc. Headquarters as the needs of the business dictate and as directed by your supervisor.
Salary. Your annual salary will be $900,000 payable every two weeks. You are scheduled to receive a compensation review in March 2025 based on your time in position.
Initial Bonus. You will receive a bonus of $500,000 within the first thirty days of your employment. This will be processed as supplemental income and is subject to supplemental tax withholding. In the event you voluntarily terminate your employment or your employment is terminated For Cause (as defined below), you will be required to repay within ninety (90) days of your last day of employment 100% of the pre-tax amount of this bonus if the termination occurs before your first employment anniversary, and 50% of the pre-tax amount of this bonus if termination occurs between your first and second employment anniversary.
Company Bonus. Based on your position, you will participate in the Company Bonus Plan. The Company Bonus Plan is an incentive program that rewards achievement of Gap Inc. and/or Division financial objectives and operational objectives as well as individual performance. Provided you begin your employment prior to November 1, 2024, you are eligible to participate in the program for fiscal 2024 (February 2024 – January 2025). Under the current program, your annual target bonus will be 150% of your base salary. Depending on results and your individual performance, your actual bonus can range from 0 – 200% of target. Bonus payments will be 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 2024 are scheduled for payment in March 2025 and you must be employed by Gap Inc. on the payment date to receive an award. Gap Inc. has the right to modify the program at any time. Management discretion can be used to modify the final award amount. Bonus payments are subject to supplemental income tax withholding. Please note that, based on your anticipated first day of employment with Gap Inc., you will not be eligible to receive a bonus for fiscal 2023.
Long-Term Incentive Awards. Your offer includes long-term incentive award(s), which give you the opportunity to share in Gap Inc.’s success over time.
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November 30, 2023
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Initial Annual Restricted Stock Unit Awards. Under the Gap Inc. 2016 Long-Term Incentive Plan (the “Stock Plan”), effective on your first day of employment with Gap, Inc (the “Date of Grant”), you will be granted Restricted Stock Units (“RSUs”) covering shares of Gap Inc. common stock (“Common Stock”) having a grant value of $1,400,000, subject to the provisions of the Stock Plan and Gap, Inc.’s standard form of stock grant agreement. The number of shares will be determined by dividing the grant dollar value by the 20-trading day simple average of the closing price of one share prior to the Date of Grant with such number rounded down to the nearest share. Awards are in the form of units that are paid in Common Stock upon vesting. The award will become vested over 4 years (25% per year) on each anniversary of the Date of Grant, provided you are employed by Gap Inc. on the vesting date. Awards are generally subject to income and employment tax withholding upon settlement.
Initial Annual Performance Restricted Stock Units Awards. Under the Stock Plan, subject to the approval of the Compensation and Management Development Committee (the “Committee”), you will be granted performance-based restricted stock units (“PRSUs”) for the fiscal 2024-2026 performance cycle covering a target number of shares of Common Stock with a grant value of $2,100,000. Such PRSU grant will be granted effective on the same date (expected to be in March 2024) as PRSU grants to the Company’s executive officers for fiscal 2024-2026 performance cycle (the “PRSU Date of Grant”). The number of target shares granted will be determined by dividing the grant dollar value by the 20-trading day simple average of the closing price of one share prior to the PRSU Date of Grant with such number rounded down to the nearest share. The PRSUs described in this paragraph shall otherwise be subject to all of the terms and conditions of the Gap Inc. PRSUs covering the fiscal 2024 through 2026 performance period expected to be granted by the Committee to the Company’s executive officers. Payout is subject to certification by the Committee and the provisions of the Stock Plan and standard form of performance stock grant agreement and earned shares 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.
You will not be eligible for additional equity awards until fiscal 2025. For fiscal 2025, subject to Committee approval, you will be eligible to participate in the Executive Officer Long-Term Incentive Program. The value and form of LTI are subject to change each year. Gap Inc. has the right to modify the program at any time. Committee discretion can be used to modify the final share amount. Shares are subject to applicable income tax withholding.
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 immediately. 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 PTO accrual. In addition, there are seven company-paid holidays. Please refer to the enclosed summary for more information about Gap Inc.’s benefit programs. Gap Inc. reserves the right to change its benefit programs at any time.
Relocation. Gap Inc. will provide you with relocation benefits in accordance with the Gap Inc. Domestic Relocation Policy provided that you relocate to the San Francisco area within 12 months of the Start Date. As part of the provision of this relocation package, it is expected that you will remain employed with the Company for a period of at least 2 years from your move date. We have also attached a Summary of Relocation Benefits (“Summary”) as Appendix A, which provides an overview of key aspects of the Move Policy. In the event of any conflict between the Summary and the Move Policy, the Summary shall prevail. A Relocation Counselor from Gap’s Global Relocation Services provider will contact you shortly after your relocation has been initiated. In the meantime,
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November 30, 2023
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should you have any question with regard to your relocation assistance or require further information please contact our Global Mobility team at [ ].
Relocation Payback. In the event you voluntarily terminate your employment or your employment is terminated For Cause (as defined below), you will be required to reimburse within ninety (90) days of your last day of employment 100% of the pre-tax amount of the relocation services if the termination occurs before your first anniversary of date of move, and 50% of the pre-tax amount of the relocation services if termination occurs between your first and second anniversary of date of move. Relocation services include all relocation expenses paid as direct reimbursements to you or to a third-party company on your behalf. You understand and agree that if your employment with the Company is terminated, all relocation services will stop on the last day of your employment.
Termination/Severance. In the event that your employment is involuntarily terminated prior to June 30, 2024 by the Company for reasons other than (i) For Cause (as defined below) or (ii) for the avoidance of doubt, death or disability, the Company will provide you the following after your “separation from service” within the meaning of Internal Revenue Code (“IRC”) Section 409A (“Separation from Service”), provided you sign a general release of claims in the form requested by the Company 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). Except for any compensation received from external board memberships in place at the time of your Separation from Service, 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. Each payment will be treated as a separate payment for purposes of IRC Section 409A, to the maximum extent possible.
(2) Through the end of the period in which you are receiving payments under paragraph (1) above or shorter period you are covered by COBRA, 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 may be 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, or any similar law or regulation).
(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. The amount of expenses eligible for reimbursement during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year. Reimbursement shall be made on or before the last day of the calendar year following the calendar year in which the reimbursement is incurred but not later than the end of the second calendar year following the calendar year 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 any non-financial component. Such bonus will be 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. In the event termination occurs after the end of a fiscal year but before the date of bonus
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payments, such bonus for the preceding fiscal year will be paid pursuant to the terms of this section and the terms of the bonus plan.
(5) Accelerated vesting (but not settlement) of restricted stock units (“RSUs”) and performance shares that remain subject only to time vesting conditions (excluding any performance shares that remain subject to performance-based vesting conditions) scheduled to vest prior to April 1 following the end of the fiscal year of termination. Shares of the Company stock in settlement of any vested RSUs and/or performance shares under this section will be delivered on the applicable regularly scheduled vesting dates subject to the terms and conditions of the applicable award agreement including, without limitation, the IRC Section 409A six-month delay language thereunder to the extent necessary to avoid taxation under IRC Section 409A.
The payments in (1), (3), (4) and (5) above are, and the payment described in (2) above may be, taxable income to you and are subject to tax withholding. If the aggregate amount that would be payable to you under paragraphs (1), (2), (3) and (4) above through the date which is six months after your Separation from Service (excluding amounts exempt from IRC Section 409A under the short-term deferral rule thereunder or Treas. Reg. Section 1.409A-1(b)(9)(v)) exceeds the limit under Treas. Reg. Section 1.409A-1(b)(9)(iii)(A) and you are a “specified employee” under Treas. Reg. Section 1.409A-1(i) on the date of your Separation from Service, then the excess will be paid to you no earlier than the date which is six months after the date of such separation (or such earlier time permitted under IRC Section 409A(a)(2)(B)(i)). This delay will only be imposed to the extent required to avoid the tax for which you would otherwise be liable under IRC Section 409A(a)(1)(B). Any delayed payment instead will be made on the first business day following the expiration of the six-month period, as applicable (or such earlier time permitted under IRC Section 409A(a)(2)(B)(i)). Payments that are not delayed will be paid in accordance with their terms determined without regard to such delay.
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; (3) breaching Gap Inc.’s policies and procedures, including but not limited to the Code of Business Conduct; where applicable, the Company shall provide reasonable notice of any breach and opportunity to remediate.
At any time, 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. 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.
After June 30, 2024, you will be eligible for severance, if any, as approved by the Committee under the same terms as similarly situated executive officers.
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 40,000 shares Common Stock within five years of the Start Date.
Recoupment Policy. As an executive officer, the Company’s recoupment policy will apply to you, as it may be in effect and/or amended from time to time.
Start Date and Orientation. Your first day with Gap Inc. will be January 8, 2024. During your first week, you will attend Happy You’re Here, our onboarding experience. This will be held virtually and will introduce you to our culture, history and what makes us unique. If you have any questions about your onboarding experience, please email [ ].
You will also receive a separate email from i9 Advantage instructing you to complete Section 1 of your I-9 prior to your start date. You will be asked to identify an individual that has agreed to act as an agent on behalf of Gap Inc. to
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November 30, 2023
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complete Section 2 of the Form I-9 as required to confirm your employment eligibility within the United States. Your Recruiter will gather the necessary information from you and will reach out with further instruction. Please review the list carefully. If you have questions about documentation, contact Employee Services at 1-866-411-2772 x20600.
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.
External Board Service. To sit on a for-profit external board of directors or advisory board you must obtain appropriate approvals. Your external board service must comply with Gap Inc.’s Code of Business Conduct, and must be approved by the Chief Executive Officer, Chief Compliance Officer and the Gap Inc. Board's Governance and Sustainability Committee.
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.
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 acknowledge that during your employment with Gap Inc., you may acquire Gap Inc.’s confidential information, which is trade secret or other proprietary non-public information (in any form), such as unannounced product information or designs, business or strategic plans, financial information and organizational charts, and other materials. Confidential Information also includes, but is not limited to, sensitive, personal information and data about co-workers, customers, consultants or other individuals, including names, addresses, e-mail addresses, telephone numbers, government identification numbers (including social security numbers), employee ID numbers, customer file information, credit card and bank account information. By signing below, you promise to responsibly use and protect Confidential Information from inappropriate access and disclosure. Nothing in this letter, however, precludes you from communicating with, reporting to or participating in any investigation or proceeding conducted by any federal or state agency, or governmental body, sharing information you gained from sources other than in the course of your work or discussing your personal contact information or other information about wages, compensation or other employment terms.
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. 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 [ ].
Non-disparagement. To the greatest extent permitted under applicable law and except as otherwise provided herein, you agree now, and after your employment with Gap Inc. terminates not to, directly or indirectly, disparage or induce others to disparage Gap Inc., its business activities, or any of its directors, managers, officers, employees, affiliates, agents or representatives (collectively, the “Related Parties”). For the purpose of this agreement, “disparage” includes, without limitation, making comments or statements online, or to any person or entity that would adversely affect in any manner (a) the conduct of the business of the Company or any of its Related Parties (including, but not limited to, any business plans or prospects) or (b) the reputation of the Company or any of the Related Parties. Nothing in this agreement prohibits you from (x) providing truthful information as required or permitted by law, including in a legal proceeding or a government investigation, (y) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that
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you have reason to believe is unlawful; or (z) providing truthful and good faith performance feedback in connection with your responsibilities to Gap Inc
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 through a written agreement with Gap Inc., signed by an officer of Gap Inc.
In the event that there is any dispute over the terms, enforcement or obligations in this letter, the prevailing party shall be entitled to recover from the other party reasonable attorney fees and costs incurred to enforce any agreements.
Please note that except for those agreements or plans referenced in this letter and attachments, 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. Please review and sign this letter.
We must receive your signed letter before or on your first day of employment. You may keep one original for your personal records.
Eric, it is our pleasure to extend this offer. We look forward to working with you.
Yours sincerely,
/s/ Richard Dickson
Richard Dickson
President & CEO, Gap Inc.
Confirmed this November 30, 2023
/s/ Eric Chan
Eric Chan