This excerpt taken from the GPS DEF 14A filed Apr 16, 2008.
Our Employee Stock Purchase Plan (the ESPP) provides our eligible employees and those of our participating subsidiaries with the opportunity to purchase shares of our common stock through convenient payroll deductions. The Board of Directors has determined that in order to continue to allow participation in the ESPP as a means to attract and retain talented employees, the number of shares issuable under the ESPP should be increased. Therefore, on March 17, 2008, the Compensation and Management Development Committee recommended and, on March 26, 2008, the Board of Directors approved an amendment to the ESPP to reserve an additional 8,000,000 shares of common stock for issuance under the ESPP, increasing the total reserved shares from 24,500,000 to 32,500,000, subject to approval of our shareholders at the Annual Meeting.
As of February 29, 2008, the Company had issued and employees had purchased 21,020,838 shares of the original 24,500,000 shares authorized under the ESPP. Accordingly, there is the possibility that, without this amendment, there would be insufficient authorized shares for future issuances. Based on past participation rates, the Company believes that the additional authorized shares will be sufficient for purchases under the ESPP for approximately five more years.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL TO AMEND THE ESPP TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR ISSUANCE THEREUNDER.
A summary of the principal features of the ESPP is provided below, but is qualified in its entirety by reference to the full text of the ESPP that was filed electronically with this proxy statement with the Securities and Exchange Commission. Such text is not included in the printed version of this proxy statement. A copy of the ESPP is available from the Companys Corporate Secretary at The Gap, Inc., Two Folsom Street, San Francisco, California 94105.