Gap (GPS)

During the first year of his employment, Mr. Murphy relocated with his family from Toronto, Canada to our headquarters in San Francisco, California. The Committee determined that relocation benefits consistent with those provided to other senior Company executives in

similar circumstances were generally sufficient, but that given Mr. Murphy’s circumstances, additional temporary living expenses for up to one year were appropriate. Income attributable to Mr. Murphy for relocation expenses that are not otherwise tax deductible is generally grossed up for taxes. Because Mr. Murphy did not relocate immediately, the Committee determined that limited personal use of a Company airplane by Mr. Murphy or members of his family at an amount not to exceed $250,000 for fiscal 2007 and $400,000 for fiscal 2008 based on the incremental cost to the Company was appropriate to provide an efficient way to minimize travel time commitment for commuting and family visitation purposes. Mr. Murphy could also request reimbursement for the cost of any commercial travel that he or his immediate family members used to travel between Toronto and San Francisco, which also counted against these amounts. The amount taxable to Mr. Murphy for this Company airplane usage was grossed-up by the Company only where travel was in connection with commuting trips to and from Toronto during the first 12 months of his employment.

Beginning in fiscal 2009, Mr. Murphy will have limited personal use of a Company airplane at an amount not to exceed $200,000 per year based on the incremental cost to the Company. The Committee approved this perquisite as both a competitive attraction and retention tool and to provide an efficient way to minimize travel time commitments. In addition, taxable income associated with personal use of the Company airplane will not be subject to tax gross up.

As part of his employment, Mr. Murphy will relocate with his family from Toronto, Canada to our headquarters in San Francisco, California. The Committee determined that relocation benefits consistent with those provided to other senior Company executives in similar circumstances were generally sufficient, but that given Mr. Murphy’s circumstances, additional temporary living expenses for up to one year were appropriate. Income attributable to Mr. Murphy for relocation expenses that is not otherwise tax deductible is generally grossed up for taxes. Because Mr. Murphy will not relocate immediately, the Committee determined that limited personal use of a Company airplane by Mr. Murphy or members of his family at an amount not to exceed $250,000 for fiscal 2007 and $400,000 for fiscal 2008 based on the incremental cost to the Company was appropriate to provide an efficient way to minimize travel time commitment for commuting and family visitation purposes. Mr. Murphy may also request reimbursement for the cost of any commercial travel that he or his immediate family members use to travel between Toronto and San Francisco, which also counts against these amounts. The amount taxable to Mr. Murphy for this corporate jet usage is grossed up by the Company only where travel is in connection with commuting trips to and from Toronto during the first 12 months of his employment.

Beginning in 2009, Mr. Murphy will have limited personal use of a Company airplane at an amount not to exceed $200,000 per year based on the incremental cost to the Company. The Committee approved this perquisite as both a competitive attraction and retention tool and to provide an efficient way to minimize travel time commitments.

Reimbursement of professional fees for legal and tax advice incurred as part of his initial employment negotiations.