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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[ X ] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended January 31, 1998 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to ______________
Commission File Number 1-7562
THE GAP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1697231
----------------- ---------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
ONE HARRISON STREET
SAN FRANCISCO, CALIFORNIA 94105
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (415) 427-2000
_______________________
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, $0.05 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
(Title of class) PACIFIC EXCHANGE, INC.
(Name of each exchange where registered)
Securities registered pursuant to Section 12(g) of the Act: NONE
_______________________
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the common equity held by non-affiliates of the
registrant as of March 9, 1998 was approximately $11,454,266,735 based upon the
last price reported for such date in the NYSE-Composite transactions.
The number of shares of the registrant's Common Stock outstanding as of March
27, 1998 was 393,914,220.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on April 28, 1998 (hereinafter referred to as the "1998
Proxy Statement") are incorporated into Parts I and III.
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended January 31, 1998 (hereinafter referred to as the "1997 Annual Report to
Shareholders") are incorporated into Parts II and IV.
The Exhibit Index is located on Page 12 hereof.
This Annual Report on Form 10-K and the information incorporated herein by
reference contain certain forward-looking statements which reflect the Company's
current view with respect to future events and financial performance. Whenever
used, the words "expect," "plan," "anticipate," "believe" and similar
expressions identify forward-looking statements.
Any such forward-looking statements are subject to risks and uncertainties
that could cause the Company's actual results of operations to differ materially
from historical results or current expectations. Some of these risks are
discussed in Item 1 of this report below, and include, without limitation,
ongoing competitive pressures in the apparel industry, risks associated with
challenging international retail environments, changes in the level of consumer
spending or preferences in apparel, and/or trade restrictions and political or
financial instability in countries where the Company's goods are manufactured,
and other factors that may be described in the Company's filings with the
Securities and Exchange Commission. Future economic and industry trends that
could potentially impact revenue and profitability remain difficult to predict.
The Company does not undertake to publicly update or revise its forward-
looking statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized.
PART I
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ITEM 1 - BUSINESS
GENERAL
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The Gap, Inc. (together with its subsidiaries, the "Company") is an
international specialty retailer which operates stores selling casual apparel,
personal care and other accessories for men, women and children under a variety
of brands including Gap, GapKids, babyGap, Banana Republic and Old Navy. As of
February 28, 1998, the Company operated 2,143 stores in the United States,
Canada, the United Kingdom, France, Germany and Japan.
The Company designs virtually all of it products for sale under its brands in
Company-operated stores. These brands and their corresponding store formats
collectively are positioned to address a broad consumer base. The Company
operates the following store formats:
GAP, GAPKIDS AND BABYGAP. Founded in 1969, Gap stores offer extensive
selections of classically-styled, high quality, casual apparel at moderate
price points. Products range from wardrobe basics, such as denim, khakis
and T-shirts, to accessories and personal care products for men and women
aged teen to adult. At February 28, 1998, the Company operated 1,023 Gap
stores, including 136 in international locations. Seventy-one of the
domestic stores are Gap Outlet stores. The Company entered the children's
apparel market with the introduction of GapKids in 1986 and babyGap in
1989. These stores offer casual basics, outerwear, shoes and other
accessories in the tradition of Gap style and quality for children aged
newborn through teen. At February 28, 1998, the Company operated a total of
573 GapKids and babyGap stores, including 105 in international locations.
BANANA REPUBLIC. Acquired in 1983 with two stores, Banana Republic now
offers sophisticated, fashionable collections of dress-casual and tailored
clothing and accessories for men and women at higher price points. At
February 28, 1998, the Company operated 259 Banana Republic stores,
including 9 in Canada.
OLD NAVY. The Company launched Old Navy in 1994 to address the market
for value-priced family apparel. Old Navy offers broad selections of
apparel, shoes and accessories for adults, children and infants in an
innovative, exciting shopping environment. At February 28, 1998, the
Company operated 288 Old Navy stores.
The Company was incorporated in the State of California in July 1969 and was
reincorporated under the laws of the State of Delaware in May 1988.
2
RECENT DEVELOPMENTS
- -------------------
During fiscal 1997, the Company continued to focus on developing and growing
its brands. The Company believes that its brands are among its most important
assets and is taking action to maintain and strengthen brand loyalty. To that
end, during fiscal 1997, the Company increased its investment in advertising and
marketing as a percentage of sales by 0.8 percentage points over the prior year.
The Company is also exploring store label credit cards, additional flagship
stores and further television advertising to complement its in-store customer
service focus. The Company also invested in the development of brand extensions
through new product offerings, such as home accessories and personal care items.
The Company continues to invest in store expansion and development of new
distribution channels to address changing market requirements. The Company has
added new store formats, including Gap and GapKids combined stores, large
flagship stores, men's/women's-only stores, baby-only stores, airport locations
and a wholesaling arrangement under which Gap products are sold in duty-free
stores in Hong Kong, Guam, Singapore, Australia and New Zealand. The Company is
exploring new channels of distribution including development of electronic
retailing which it launched in November 1997 and a catalog for the Banana
Republic division which it plans to launch later in 1998. The Company has no or
only limited operating history in the new channels of distribution and is faced
with competition from established retailers in these new lines. There is no
guarantee that these investments will result in increased profitability.
The Company continued to expand internationally in fiscal 1997. The
International division is faced with competition in its European and Japanese
markets from established regional and national chains. Operations in these
markets involve special risks and complexities. If such expansion is not
successful, the Company's results of operations could be adversely affected.
Specifically, the division's operations in Germany and France are not profitable
at the present early stage of expansion, due in part to a soft retailing
environment, low brand awareness, and Company investments in infrastructure,
including expansion of the European Support Office. The Company's ability to
grow successfully in the continental European markets will depend in part on
determining a sustainable profit formula to build brand loyalty and gain market
share in the especially challenging retail environment of Germany and France.
The Company has begun a process to integrate the Gap and GapKids field
organizations over the next 18 months to achieve a singular brand focus.
Thinking and acting as a single brand will allow the Company to better serve its
customers, to work more closely with the community, and to take full advantage
of real estate opportunities. Integration also will allow the Company to staff
more consistently and train more completely. The integration process entails a
number of risks, including decreased product knowledge of sales associates due
to increased product assortments and diversion of sales associates' attention
adversely impacting customers' experience and quality of service, diversion of
management's attention from other business matters, and possible employee
dissatisfaction with changes in job scope or supervisor assignments. In
particular, sales productivity may decline as sales associates learn new product
information and selling techniques. To mitigate these risks, the Company will
implement a phased approach that accommodates employee training, provides time
for supervisors to become confident and competent in the new environment, and
pilots certain aspects of the integration before rollout.
The Company is addressing the need to ensure that its operations will not be
adversely impacted by software or other system failures related to year 2000. A
program office was established in 1997 to coordinate the identification,
evaluation, and implementation of any necessary changes to computer systems,
applications, and business processes. The costs associated with this effort are
expected to be incurred through 1999 and are not expected to have a material
impact on results of operations, cash flows, or financial condition in any given
year. However, no assurances can be given that the Company will be able to
completely identify or address all year 2000 compliance issues, or that third
parties with whom the Company does business will not experience system failures
as a result of the year 2000 issue, nor can the Company fully predict the
consequences of noncompliance.
MERCHANDISE INVENTORY, REPLENISHMENT AND DISTRIBUTION
- -----------------------------------------------------
The retail apparel business fluctuates according to changes in customer
preferences dictated in part by fashion and season. These fluctuations
especially affect the inventory owned by apparel retailers, since merchandise
usually must be ordered well in advance of the season and sometimes before
fashion trends are evidenced by customer purchases. The Company is also
vulnerable to changing fashion trends. In addition, the cyclical nature of the
retail
3
business requires the Company to carry a significant amount of inventory,
especially prior to peak selling seasons when the Company and other retailers
generally build up their inventory levels. The Company must enter into contracts
for the purchase and manufacture of apparel well in advance of the applicable
selling season. As a result, the Company is vulnerable to demand and pricing
shifts and to errors in selection and timing of merchandise purchases.
The Company reviews its inventory levels in order to identify slow-moving
merchandise and broken assortments (items no longer in stock in a sufficient
range of sizes) and uses markdowns to clear merchandise. Markdowns may be used
if inventory exceeds customer demand for reasons of style, seasonal adaptation,
changes in customer preference or lack of consumer acceptance of fashion items,
or if it is determined that the inventory in stock will not sell at its
currently marked price. Such markdowns may have an adverse impact on earnings,
depending on the extent of the markdowns and amount of inventory affected.
Because the Company does not carry much replenishment inventory in its stores,
such inventory is maintained in the Company's distribution centers in
California, Kentucky, Maryland, Tennessee and Canada and in distribution centers
operated by third parties in The Netherlands and Japan, and then shipped to the
stores.
STORE OPERATIONS AND EXPANSION
- ------------------------------
The Company's stores offer a shopper-friendly environment with an assortment
of casual clothing and accessories which emphasizes style, quality and good
value. The range of apparel displayed in each store varies significantly
depending on the selling season and the size and location of the store.
The Company's stores generally are open seven days per week (where permitted
by law), three to six nights per week and most holidays. All sales are made for
cash, personal checks or on credit cards issued by others.
The Company's continued success depends, in part, upon its ability to increase
sales at existing store locations, to open new stores and to operate stores on a
profitable basis. There can be no assurance that the Company's growth will
result in enhanced profitability or that it will continue at the same rate in
future years.
SUPPLIERS
- ---------
The Company purchases merchandise from approximately 1,200 suppliers located
domestically and overseas. No supplier accounted for more than 5% of the
Company's fiscal 1997 purchases. Of the Company's merchandise sold worldwide
during fiscal 1997, approximately 27% of all units (representing approximately
18% of total cost) were produced domestically while the remaining 73% of all
units (82% of cost) were made outside the United States. Approximately 6% of
the Company's total merchandise units (representing 8% of cost) was from Hong
Kong, with the remainder coming from 42 other countries. Any event causing a
sudden disruption of imports from Hong Kong or other foreign countries,
including the imposition of additional import restrictions, could have a
material adverse effect on the Company's operations. Substantially all of the
Company's foreign purchases of merchandise are negotiated and paid for in U.S.
dollars.
The Company cannot predict whether any of the countries in which its products
currently are manufactured or may be manufactured in the future will be subject
to trade restrictions imposed by the U.S. government, including the likelihood,
type or effect of any such restrictions. Trade restrictions, including
increased tariffs or quotas, or both, against apparel items could increase the
cost or reduce the supply of apparel available to the Company and adversely
affect the Company's business, financial condition and results of operations.
The Company pursues a diversified global import strategy which includes
relationships with vendors in over 40 countries. These sourcing operations may
be adversely affected by political and financial instability resulting in the
disruption of trade from exporting countries, significant fluctuation in the
value of the U.S. dollar against foreign currencies, restrictions on the
transfer of funds and/or other trade disruptions. The current financial
instability in Asia is an example of the instability which could affect some
suppliers adversely. Although to date the instability in Asia has not had a
material adverse effect on the Company's ability to import apparel and therefore
the Company's results of operations and financial condition, no assurances can
be given that they will not have such an effect in the future.
4
SEASONAL BUSINESS
- -----------------
The Company's business follows a seasonal pattern, peaking over a total of
about 10 to 12 weeks during the Back-to-School (mid-August through early
September) and Holiday (early November through December) periods. During fiscal
year 1997, these periods accounted for approximately 35% of the Company's annual
sales.
COMPETITION
- -----------
The Company's business is highly competitive. The Company's stores compete
with national and local department, specialty and discount store chains and
independent retail stores which handle similar lines of merchandise. Some
competitors have larger sales and assets than the Company.
Depth of selection in sizes, colors and styles of merchandise, merchandise
procurement and pricing, ability to anticipate fashion trends and customer
preferences, inventory control, reputation, quality of merchandise, store design
and location, advertising and customer service are all important factors in
competing successfully in the retail industry. Given the large number of
companies in the retail industry, the Company cannot estimate the number of its
competitors or its relative competitive position.
The performance of the Company in recent years has increased imitation by
other retailers. Such imitation has made and will continue to make the retail
environment in which the Company operates more competitive. In addition, the
success of the Company's operations depends upon a number of factors relating to
consumer spending, including future economic conditions affecting disposable
consumer income such as employment, business conditions, interest rates and
taxation. A decline in consumer spending on apparel could have a material
adverse effect on the Company's net sales and profitability.
ADVERTISING
- -----------
In fiscal 1997, the Company increased its investment in advertising and
marketing as a percentage of sales by 0.8 percentage points over the prior year.
Besides expanding the number of print ads placed in major metropolitan
newspapers and their Sunday magazines, major news weeklies and lifestyle and
fashion magazines, the Company's ads appeared in various outdoor venues, such as
mass transit posters, exterior bus panels, bus shelters and gigantic billboards
spanning entire buildings. In addition, the Company ran TV ads for its Gap,
GapKids, and babyGap concepts and TV and radio ads for Old Navy. The Company
plans to continue increasing its investments in advertising and marketing as a
percentage of sales in 1998. There can be no assurances that these increased
investments will result in increased sales or profitability.
EMPLOYEES
- ---------
On January 31, 1998, the Company had a work force of approximately 81,000
employees. The Company also hires temporary employees during the peak Back-to-
School and Holiday seasons. The Company considers its employee relations to be
good.
TRADEMARKS AND SERVICE MARKS
- ----------------------------
The trademarks and service marks for Gap, GapKids, babyGap, Banana Republic
and Old Navy, and certain other trademarks either have been registered, or have
trademark applications pending, with the United States Patent and Trademark
Office and with the registries of many foreign countries.
5
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
The Chairman of the Company is Donald G. Fisher. Millard S. Drexler is the
President and Chief Executive Officer of the Company. Robert J. Fisher is
Executive Vice President of the Company and President of Gap Division. Each of
Donald G. Fisher, Robert J. Fisher and Millard S. Drexler is a director of the
Company and the required information with respect to each of them is set forth
in the table located in the section entitled "Nominees for Election as
Directors" of the 1998 Proxy Statement and is incorporated by reference herein.
The following are also executive officers of the Company:
NAME, AGE, POSITION AND PRINCIPAL OCCUPATION DURING PAST FIVE YEARS:
ANNE B. GUST, 40, Senior Vice President and General Counsel since April
1994; Vice President - General Counsel, 1993-94. Joined the Company in
1991.
WARREN R. HASHAGEN, 47, Senior Vice President - Finance and Chief Financial
Officer since November 1995; Senior Vice President - Finance, 1992-95.
Joined the Company in 1982.
JOHN B. WILSON, 38, Chief Operating Officer since March 1998; Executive
Vice President since October 1996; and Chief Administrative Officer from
October 1996 to March 1998. Executive Vice President, Finance and Strategy
and Chief Financial Officer of Staples, Inc., 1992-96.
ITEM 2 - PROPERTIES
During fiscal year 1997, the Company opened 298 stores and closed 22. The
newly-opened stores include 98 Gap stores (including 18 international
locations), 76 GapKids and babyGap stores (including 21 international
locations), 34 Banana Republic stores (including one store in Canada), and 90
Old Navy stores. In addition, during fiscal 1997, the Company expanded 98
stores. The expanded stores include 48 Gap stores, 19 GapKids stores, 27 Banana
Republic stores, and 4 Old Navy stores. The 2,130 stores operating as of
January 31, 1998 aggregated approximately 15 million square feet. The Company
leases virtually all of its store premises. Terms generally range from five to
15 years with one or two five-year renewal options. Most leases provide for
additional rent based on a percentage of store sales above a certain level in
addition to or in lieu of minimum rentals, as well as for the payment of certain
other expenses. Some leases contain cancellation clauses in favor of the
Company if specified sales levels are not achieved. In the United States, the
Company's stores are located in all of the 50 largest metropolitan statistical
areas.
The Company currently leases most of its headquarters and regional office
buildings, as well as its Eastern Distribution Center (EDC) and Kentucky
Distribution Center (KDC). The EDC/KDC in Erlanger, Kentucky together consist
of approximately 1,220,000 square feet. Their lease term runs through February
28, 2003, with options to extend the lease for an additional 30 years. In order
to capitalize on synergies with the nearby EDC/KDC, the Company leases a 325,000
square foot structure for consolidation/deconsolidation purposes and has
recently entered into a lease for a 520,000 square foot facility for
distribution purposes, both in Hebron, Kentucky.
The Company owns its Canadian Distribution Center (CDC) located in Brampton,
Ontario. It consists of approximately 363,000 square feet. The Company owns
its Western Distribution Center (WDC), a 344,000 square-foot facility located in
Ventura, California, as well as an adjacent five acre parcel for possible future
expansion. The Atlantic Distribution Center (ADC), a facility owned by the
Company in Edgewood, Maryland, covers approximately 745,000 square feet. The
Company also owns 156 adjacent acres, portions of which could be used for
potential expansion of the ADC. The Southern Distribution Center (SDC), a
facility owned by the Company in Gallatin, Tennessee, consists of approximately
769,000 square feet. The Company also owns its Holland Distribution Center
(HDC), a 127,000 square foot facility located in Roosendaal, The Netherlands, to
serve its European stores, and its Japan Distribution Center (JDC), a 30,000
square foot facility located in Funabashi City, Chiba, Japan, to serve its
Japanese stores. Both these facilities are operated by third parties.
6
During the third quarter of 1997, the Company commenced construction on a
565,000 square foot distribution center in Fresno, California. The facility is
expected to be in operation in early 1999.
In late 1997, the Company completed construction of a 189,000 square foot
building in San Bruno, California which serves as part of the Company's
headquarters facilities. The Company continues to explore alternatives for
additional corporate offices in San Francisco and San Bruno, California. The
Company acquired land in 1997 in San Francisco and in the fourth quarter entered
into a purchase contract to acquire land in San Bruno.
Item 3 - LEGAL PROCEEDINGS
The Company is a party to routine litigation incident to its business. Some of
the lawsuits to which the Company is a party are covered by insurance and are
being defended by the Company's insurance carriers. The Company has established
reserves which management believes are adequate to cover any litigation losses
which may occur.
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
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ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information required by this item is incorporated herein by reference to
page 25 of the 1997 Annual Report to Shareholders included as Exhibit 13 to this
Annual Report on Form 10-K.
ITEM 6 - SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
pages 20 and 21 of the 1997 Annual Report to Shareholders included as Exhibit 13
to this Annual Report on Form 10-K.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this item is incorporated herein by reference to
pages 22-25 of the 1997 Annual Report to Shareholders included as Exhibit 13 to
this Annual Report on Form 10-K.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is incorporated herein by reference to
page 38 of the Annual Report to Shareholders included as Exhibit 13 to this
Annual Report on Form 10-K.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference
to pages 26-37 of the 1997 Annual Report to Shareholders included as Exhibit 13
to this Annual Report on Form 10-K.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
7
PART III
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ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is incorporated herein by reference
to the section entitled "Nominees for Election as Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the 1998 Proxy Statement. See
also Item 1 above in the section entitled "Executive Officers of the
Registrant."
In addition, the following persons currently are directors of the Company,
but will not stand for re-election at the Annual Meeting of Shareholders to be
held on April 28, 1998:
SERVED AS
DIRECTOR
NAME, AGE, PRINCIPAL OCCUPATION DURING PAST FIVE YEARS AND OTHER INFORMATION SINCE
- ---------------------------------------------------------------------------- ----------
LUCIE J. FJELDSTAD, 54............................................................................... 1995
President, Fjeldstad International, consulting company, 1997-present, 1993-95. President, Video
and Networking, Tektronix, Inc., electronics company, 1995-97. Vice President and General
Manager, Multimedia, IBM, 1992-93. Director of Entergy Corp. DE, utility holding company; and
Director of Data Dimensions Inc., a year 2000 software company.
WILLIAM A. HASLER, 56................................................................................ 1991
Dean, Haas Graduate School of Business, University of California, Berkeley since 1991. Director
of Tenera, Inc., information services company; Director of Aphton, Inc., biotechnology
pharmaceutical company; Director of Walker Interactive Systems, Inc., software company; and
Director of TCSI, communications technology company. Governor of the Pacific Stock Exchange.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by reference
to the sections entitled "Compensation of Directors," "Summary of Executive
Compensation," "Stock Options," "Employment Contracts and Termination of
Employment Arrangements," and "Compensation Committee Interlocks and Insider
Participation" in the 1998 Proxy Statement.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by reference
to the section entitled "Beneficial Ownership of Shares" in the 1998 Proxy
Statement.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by reference
to the section entitled "Other Reportable Transactions" in the 1998 Proxy
Statement.
PART IV
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ITEM 14 - EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following consolidated financial statements, schedules and exhibits
are filed as part of this report or are incorporated herein as indicated.
8
(1) Financial Statements
--------------------
(i) Independent Auditors' Report. Incorporated by reference to
page 26 of the 1997 Annual Report to Shareholders included
as Exhibit 13 to this Annual Report on Form 10-K.
(ii) The consolidated balance sheets as of January 31, 1998 and
February 1, 1997 and the related consolidated statements of
earnings, cash flows, and shareholders' equity and notes
thereto for each of the three fiscal years in the period
ended January 31, 1998 are incorporated by reference to
pages 27-37 of the 1997 Annual Report to Shareholders
included as Exhibit 13 to this Annual Report on Form 10-K.
(2) Financial Statement Schedules
-----------------------------
Schedules have been omitted because they are not required or are
not applicable or because the information required to be set forth
therein either is not material or is included in the financial
statements or notes thereto.
(3) Exhibits
--------
Incorporated herein by reference is a list of the Exhibits
contained in the Exhibit Index which begins on sequentially numbered
page 12 of this Annual Report on Form 10-K.
(b) No reports on Form 8-K were filed or required to be filed for the last
quarter of the fiscal year.
9
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE GAP, INC.
Date: April 3, 1998 By /s/ MILLARD S. DREXLER
-----------------------
Millard S. Drexler,
Chief Executive Officer
(Principal Executive Officer)
Date: April 3, 1998 By /s/ WARREN R. HASHAGEN
----------------------
Warren R. Hashagen,
Senior Vice President
and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: April 3, 1998 By /s/ ADRIAN D.P. BELLAMY
------------------------------
Adrian D. P. Bellamy, Director
Date: April 3, 1998 By /s/ JOHN G. BOWES
------------------------------
John G. Bowes, Director
Date: April 3, 1998 By /s/ MILLARD S. DREXLER
------------------------------
Millard S. Drexler, Director
Date: April 3, 1998 By /s/ DONALD G. FISHER
------------------------------
Donald G. Fisher, Director
Date: April 3, 1998 By /s/ DORIS F. FISHER
------------------------------
Doris F. Fisher, Director
10
SIGNATURES (con't.)
-------------------
Date: April 3, 1998 By /s/ ROBERT J. FISHER
-------------------------------
Robert J. Fisher, Director
Date: April 3, 1998 By /s/ LUCIE J. FJELDSTAD
-------------------------------
Lucie J. Fjeldstad, Director
Date: April 3, 1998 By /s/ WILLIAM A. HASLER
-------------------------------
William A. Hasler, Director
Date: April 3, 1998 By /s/ JOHN M. LILLIE
-------------------------------
John M. Lillie, Director
Date: April 3, 1998 By /s/ CHARLES R. SCHWAB
-------------------------------
Charles R. Schwab, Director
Date: April 3, 1998 By /s/ BROOKS WALKER, JR.
-------------------------------
Brooks Walker, Jr., Director
Date: April 3, 1998 By /s/ SERGIO ZYMAN
-------------------------------
Sergio Zyman, Director
11
Exhibit Index
3.1 Registrant's Amended and Restated Certificate of Incorporation, filed as
Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year ended
January 30, 1993, Commission File No. 1-7562.
3.2 Registrant's By-Laws, filed as Exhibit C to Registrant's definitive proxy
statement for its annual meeting of stockholders held on May 24, 1988,
Commission File No. 1-7562.
3.3 Amended Article IV of Registrant's By-Laws, filed as Exhibit 4.4 to
Registrant's Registration Statement on Form S-8, Commission File No. 333-
00417.
4 Indenture, dated September 1, 1997, between the Registrant and Harris
Trust Company of California filed as Exhibit 4 to Registrant's Form 10-Q
for the quarter ended November 1, 1997, Commission File No. 1-7562.
10.1 Credit Agreement dated as of July 1, 1997 between the Registrant; Citicorp
USA Inc.; Bank Of America National; Trust & Savings Association; The
Hongkong and Shanghai Banking Corporation Limited; Nationsbank Of Texas,
N.A.; The Royal Bank Of Canada; Bank Of Montreal; Societe Generale; The
Fuji Bank, Limited; Morgan Guaranty Trust Company Of New York; The
Sumitomo Bank Limited; Deutsche Bank AG New York Branch and/or Cayman
Islands Branch; Union Bank Of Switzerland, New York Branch; U.S. National
Bank Of Oregon; and Citibank, N.A. filed as Exhibit 10.3 to Registrant's
Form 10-Q for the quarter ended August 2, 1997, Commission File No. 1-
7562.
10.2 Credit Agreement dated as of July 1, 1997 between the Registrant; Citicorp
USA Inc.; Bank Of America National; Trust & Savings Association; The
Hongkong and Shanghai Banking Corporation Limited; Nationsbank Of Texas,
N.A.; The Royal Bank Of Canada; Bank Of Montreal; Societe Generale; The
Fuji Bank, Limited; Morgan Guaranty Trust Company Of New York; The
Sumitomo Bank Limited; Deutsche Bank AG New York Branch and/or Cayman
Islands Branch; Union Bank of Switzerland, New York Branch; U.S. National
Bank of Oregon; and Citibank, N.A. filed as Exhibit 10.4 to Registrant's
Form 10-Q for the quarter ended August 2, 1997, Commission File No. 1-
7562.
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.3 1981 Stock Option Plan, filed as Exhibit 4.1 to Registrant's Registration
Statement on Form S-8, Commission File No. 33-54690.
12
10.4 Management Incentive Restricted Stock Plan II, filed as exhibit 4.1 to
Registrant's Registration Statement on Form S-8, Commission File
No. 33-54686.
10.5 GapShare, filed as Exhibit 4.1 to Registrant's Registration Statement on
Form S-8, Commission File No. 333-00417.
10.6 Amendment No. 5 to GapShare filed as Exhibit 10.1 to Registrant's Form
10-Q for the quarter ended November 1, 1997, Commission File No. 1-7562.
10.7 Description of Management Incentive Cash Award Plan filed as Exhibit
10.34 to Registrant's Annual Report on Form 10-K for the year ended
January 29, 1994, Commission File No. 1-7562.
10.8 Employee Stock Purchase Plan, filed as Exhibit 4.1 to Registrant's
Registration Statement on Form S-8, Commission File No. 33-56021.
10.9 Amendment No. 1 to the Employee Stock Purchase Plan.
10.10 Amended and Restated Executive Management Incentive Cash Award Plan,
filed as Exhibit B to the Registrant's definitive proxy statement for its
annual meeting of stockholders held on May 23, 1995, Commission File No.
1-7562.
10.11 Deferred Compensation Plan filed as Exhibit 10.36 to Registrant's Annual
Report on Form 10-K for the year ended January 29, 1994, Commission File
No. 1-7562.
10.12 Executive Capital Accumulation Plan filed as Exhibit 10.36 to
Registrant's Annual Report on Form 10-K for the year ended January 28,
1995, Commission File No. 1-7562.
10.13 1996 Stock Option and Award Plan, filed as Exhibit A to the Registrant's
definitive proxy statement for its annual meeting of stockholders held on
May 21, 1996, Commission File No. 1-7562.
10.14 Amendment Number 1 to the Registrant's 1996 Stock Option and Award Plan
filed as Exhibit 10.1 to Registrant's Form 10-Q for the quarter ended
August 2, 1997, Commission File No. 1-7562.
10.15 Amendment Number 2 to the Registrant's 1996 Stock Option and Award Plan.
10.16 Form of Nonqualified Stock Option Agreement for employees under
Registrant's 1996 Stock Option and Award Plan filed as Exhibit 10.5 to
Registrant's Form 10-Q for the quarter ended August 2, 1997, Commission
File No. 1-7562.
10.17 Form of Nonqualified Stock Option Agreement for directors under
Registrant's 1996 Stock Option and Award Plan filed as Exhibit 10.6 to
Registrant's Form 10-Q for the quarter ended August 2, 1997, Commission
File No. 1-7562.
10.18 Form of Restricted Stock Agreement under Registrant's 1996 Stock Option
and Award Plan filed as Exhibit 10.7 to Registrant's Form 10-Q for the
quarter ended August 2, 1997, Commission File No. 1-7562.
10.19 Executive Long-Term Cash Award Performance Plan, filed as Exhibit B to
the Registrant's definitive proxy statement for its annual meeting of
stockholders held on May 21, 1996, Commission File No. 1-7562.
10.20 Relocation Loan Plan, filed as Exhibit A to Registrant's definitive proxy
statement for its annual meeting of stockholders held on October 25,
1977, Commission File No. 1-7562.
10.21 Certificate of Corporate Resolution amending the Relocation Loan Plan,
adopted by the Board of Directors on November 27, 1990, filed as Exhibit
10.34 to Registrant's Annual Report on Form 10-K for the year ended
February 2, 1991, Commission File No. 1-7562.
10.22 Restricted Stock Award Agreement, dated April 13, 1992, between
Registrant and Millard Drexler, filed as Exhibit 10.41 to Registrant's
Annual Report on Form 10-K for the year ended January 30, 1993,
Commission File No. 1-7562.
10.23 First Amendment to Restricted Stock Award Agreement, dated October 23,
1992, between Registrant and Millard Drexler, filed as Exhibit 10.42 to
Registrant's Annual Report on Form 10-K for the year ended January 30,
1993, Commission File No. 1-7562.
10.24 Non-Employee Director Retirement Plan, dated October 27, 1992, filed as
Exhibit 10.43 to Registrant's Annual Report on Form 10-K for the year
ended January 30, 1993, Commission File No. 1-7562.
10.25 Statement Regarding Non-Employee Director Retirement Plan
10.26 The Gap, Inc. Nonemployee Director Deferred Compensation Plan, filed as
Exhibit 4.1 to Registrant's Registration Statement on Form S-8,
Commission File No. 333-36265.
10.27 Form of Discounted Stock Option Agreement under the Nonemployee Director
Deferred Compensation Plan, filed as Exhibit 4.5 to Registrant's
Registration Statement on Form S-8, Commission File No. 333-36265.
10.28 Employment Arrangement, dated July 16, 1997, between Registrant and John
B. Wilson, filed as Exhibit 10.45 to Registrant's Annual Report on Form
10-K for the year ended February 1, 1997, Commission File No. 1-7562.
13 Portions of Registrant's annual report to security holders for the fiscal
year ended January 31, 1998.
21 Subsidiaries of Registrant.
23 Consent of Deloitte & Touche LLP.
27.1 Financial Data Schedule for the year ended January 31, 1998.
27.2 Financial Data Schedule by quarter for the year ended February 1, 1997.
27.3 Financial Data Schedule by quarter for the first three quarters of fiscal
1997.