This excerpt taken from the GPS 8-K filed Feb 12, 2008.
Performance Stock Awards. Based on your position as Corporate Executive Vice President, you will continue to be eligible for performance stock awards. Performance stock awards reward achievement of Gap Inc. and/or Division financial objectives. Under the current program, your annual target for this program is equal to 40% of your base salary. Depending on results, your actual performance stock award, if any, may be higher or lower and can reach a maximum of 80%. Performance stock awards will be prorated based on active time in position, changes in base salary, or changes to the performance stock award target that may occur during the fiscal year. Awards are made in the form of performance units that are paid in Gap Inc. stock upon vesting. For fiscal 2007, the award of your performance stock units is scheduled to be made in March 2008 provided you are
employed by Gap Inc. on the date of the award with a performance rating of On Target or above. The number of performance units will be determined in March 2008 by dividing the value of the award as a percentage of base salary by the fair market value of Gap Inc. common stock on the award date, rounded down to the nearest whole performance unit. The award will vest 50% two years from the date of grant and 50% three years from the date of grant provided you are employed by Gap Inc. on the vesting dates. Awards are subject to approval by the Committee and the provisions of Gap Inc.s stock plan. Gap Inc. has the right to modify the program at any time. Management discretion can be used to modify the final award amount. Awards are subject to income tax withholding upon vesting.
You may be eligible for future Long-Term Incentive Awards as a participant in the Focal Review process.