8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report

(Date of earliest event reported)

February 27, 2008

THE GAP, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-7562	94-1697231
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Two Folsom Street San Francisco, California	94105
(Address of principal executive offices)	(Zip Code)

(650) 952-4400

(Registrant’s telephone number,

including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On February 28, 2008, The Gap, Inc. (the “Company”) issued a press release announcing the authorization of an additional $1 billion for the Company’s share repurchase program. A copy of this press release is attached hereto as Exhibit 99.2.

Concurrent with this authorization, on February 27, 2008, the Company entered into purchase agreements (the “Agreements”) with individual members of the Fisher family: John J. Fisher, William S. Fisher, Robert J. Fisher, and Donald and Doris Fisher (each, a “Seller”). Pursuant to the agreements, the Company has agreed to buy and each Seller has agreed to sell a number of shares of the Company’s common stock which in the aggregate among all of the Sellers would equal approximately 16% of the total number of shares purchased by the Company pursuant to its $1 billion repurchase program. The purchase price for the shares of the Company’s common stock to be purchased from each Seller will be determined on a monthly basis and will be the weighted average price that the company pays for share repurchases pursuant to its repurchase program in the open market. Either the Company or the individual Seller may terminate the agreement upon 15 business days notice. The foregoing description of the Agreements is qualified in its entirety by reference to the text of the Agreements, copies of which are filed as Exhibits 10.1 through 10.4 to this Current Report on Form 8-K.

Item 2.02. Results of Operations and Financial Condition

On February 28, 2008, the Company issued a press release announcing the Company’s earnings for the fourth quarter and fiscal year ended February 2, 2008. A copy of this press release is attached hereto as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure

On February 28, 2008, the Company issued a press release announcing the authorization of an additional $1 billion for the Company’s existing share repurchase program. A copy of this press release is attached hereto as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

10.1	Purchase Agreement with Donald G. Fisher and Doris F. Fisher dated February 27, 2008.
10.2	Purchase Agreement with John J. Fisher dated February 27, 2008.
10.3	Purchase Agreement with Robert J. Fisher dated February 27, 2008.
10.4	Purchase Agreement with William S. Fisher dated February 27, 2008.
99.1	Press Release dated February 28, 2008 announcing earnings for the quarter and fiscal year ended February 2, 2008.
99.2	Press Release dated February 28, 2008 announcing increase in share repurchase program.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		THE GAP, INC. (Registrant)
Date:	February 28, 2008	By:	/s/ Sabrina L. Simmons
			Sabrina L. Simmons
			Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
10.1	Purchase Agreement with Donald G. Fisher and Doris F. Fisher dated February 27, 2008.
10.2	Purchase Agreement with John J. Fisher dated February 27, 2008.
10.3	Purchase Agreement with Robert J. Fisher dated February 27, 2008.
10.4	Purchase Agreement with William S. Fisher dated February 27, 2008.
99.1	Press Release dated February 28, 2008 announcing earnings for the quarter and fiscal year ended February 2, 2008.
99.2	Press Release dated February 28, 2008 announcing increase in share repurchase program.

EX-10.1

Exhibit 10.1

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of February 27, 2008 among The Gap, Inc., a Delaware corporation (the “Company”), Donald G. Fisher and Doris F. Fisher (together, “Fisher” and, together with any revocable family trust through which Fisher beneficially owns common stock of the Company, “Seller”).

W I T N E S S E T H:

WHEREAS, the Company is authorized to purchase from time to time its Shares (as defined below) pursuant to a share repurchase program authorized by the Board of Directors of the Company on February 14, 2008; and

WHEREAS, the Stock Purchase Agreement, dated August 22, 2007, between the Company and Seller was terminated upon completion of the Company’s prior share repurchase program;

WHEREAS, Fisher is the direct beneficial owner of 51,848,960 Shares of the Company (as defined below), representing approximately 7.07% of the outstanding Shares of the Company as of the date hereof; and

WHEREAS in consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the Company and the Sellers intending to be bound legally, each agree as follows:

ARTICLE 1

Definitions

Section 1.1. Definitions. (a) The following terms, as used herein, have the following meanings:

“AFR” means, for any Business Day, the monthly short-term applicable federal rate, based on a monthly compounding period, published by the Internal Revenue Service for the Applicable Month in which such Business Day occurs.

“AFR Carry Amount” means, for any period, an amount determined at the end of each period that is the sum of all Daily AFR Carry Amounts for such period.

“Average Price” means, for any Applicable Month, the weighted average price, rounded to four decimal points, at which the Company purchased Shares during the Applicable Month pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such Applicable Month divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such Applicable Month; provided that if the Agreement has been terminated in accordance with Section 7.1, the Average Price for any Closing thereafter shall be calculated only through the day immediately prior to the termination date of the Agreement. For the avoidance of doubt, Shares acquired in “open market purchases” shall not include the Acquired Shares.

“Business Day” means (a) for purposes of determining the date of a Closing or Closing Notice, a day on which banks are not required or authorized by law to close in New York City and (b) for all other purposes under this Agreement, a day on which the New York Stock Exchange is open for trading.

“Daily AFR Carry Amount” means, for each day, an amount determined at the end of each period equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds and (b) AFR divided by 360; provided that if such day is not a Business Day, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds through the most recent Business Day of such Applicable Month and (b) AFR in effect as of the most recent Business Day divided by 360; and provided, further, that for any day after the last Business Day of such Applicable Month and prior to the date of Closing with respect to such Applicable Month, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds as of the most recent Business Day and (b) AFR in effect as of the last Business Day of the Applicable Month divided by 360.

“Daily Average Price” means, for any day, the weighted average price at which the Company purchased Shares during the applicable day pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such day divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such day.

“Dividend Adjusted Average Price” means, on any day of an Applicable Month on which all of the following conditions are met: (a) the day is after the public announcement of the dividend, (b) the day precedes an Ex-Dividend Date that occurs during such Applicable Month, and (c) the record date for the shareholders of record entitled to receive such dividend will occur on or before the Closing for such Applicable Month, then Dividend Adjusted Average Price of the Acquired Shares for such day shall be calculated as (i) the Daily Average Price for such day minus (ii) the amount of the dividend per Share which has been declared in respect of the Acquired Shares.

“Ex-Dividend Date” means the date that is two trading days prior to the record date which has been established in connection with the declaration of a dividend in respect of the Acquired Shares or such other date as may be established with respect to the Shares as an “ex-dividend” date by the New York Stock Exchange.

“Implied Daily Acquired Shares” means, for each Business Day of an Applicable Month, the number of Acquired Shares which were attributable to such day’s trading as determined by reference to the number of Shares purchased by the Company pursuant to the Program (other than Acquired Shares) on such Business Day as a percent of the Company’s total purchases pursuant to the Program (other than Acquired Shares) during each Applicable Month determined after the close of trading on the last Business Day of each Applicable Month and prior to the delivery of the Closing Notice relating to the Closing for each Applicable Month. Implied Daily Acquired Shares may result in fractional shares.

2

“Implied Daily Settlement Proceeds” means, for each Business Day of an Applicable Month, the product of (a) the number of Implied Daily Acquired Shares which were deemed to have been acquired on the day that was three trading days prior to such Business Day and (b) the Daily Average Price or Dividend Adjusted Average Price, if applicable, for such prior day.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Program” means the share repurchase program approved on February 14, 2008 authorizing the Company to purchase from time to time Shares up to a maximum aggregate amount (including existing authority) of $1 billion.

“Seller Ownership Percentage” means 7.07%, which represents a percentage equal to (a) the number of Shares directly owned by such Seller as of February 2, 2008, divided by (b) 733,464,398 shares, which represent the Company’s total outstanding basic Shares as of February 2, 2008, multiplied by 100.

“Shares” means the common stock of the Company.

(b) For purposes of the definitions of “Average Price,” “Daily Average Price” and “Implied Daily Acquired Shares”, Shares purchased by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles.

(c) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Acquired Shares	2.1
Applicable Month	2.1
Closing	2.3
Closing Notice	2.3
Governmental Authority	3.2
Purchase Price	2.2

3

ARTICLE 2

Purchase and Sale

Section 2.1. Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, Fisher agrees to sell, transfer, assign and deliver to the Company, and the Company agrees to purchase from Seller, with respect to each calendar month in which the Company purchases Shares pursuant to the Program (the “Applicable Month”), a number of Shares at each Closing calculated in accordance with Annex A hereto (the Shares acquired from Seller, the “Acquired Shares”). In the event that the Agreement is terminated pursuant to Section 7.1, the day immediately prior to the termination date will be deemed to be the last day of the Applicable Month.

Section 2.2. Purchase Price. The aggregate purchase price for the Acquired Shares at each Closing (the “Purchase Price”) shall be equal to the product of (i) the aggregate number of Acquired Shares to be purchased at such Closing multiplied by (ii) the Average Price for the Applicable Month. An interest factor shall be paid along with the Purchase Price for the Acquired Shares equal to the AFR Carry Amount. The Purchase Price shall also include an adjustment to the Average Price of the Acquired Shares, if necessary, to take into account the effect of any dividends or similar distributions relating to the Acquired Shares to be settled for the Applicable Month in the same manner and under the same conditions as provided for in the definition of “Dividend Adjusted Average Price”. The Purchase Price and the AFR Carry Amount shall be paid as provided in Section 2.3.

Section 2.3. Closing. Within five Business Days after the end of each Applicable Month, the Company shall deliver to Fisher a notice (each, a “Closing Notice”) setting forth (i) the date of Closing, (ii) the number of Acquired Shares to be purchased by the Company from Seller pursuant to Section 2.1, (iii) the Purchase Price and the AFR Carry Amount and (iv) the details of the calculation of the Purchase Price and the AFR Carry Amount, sufficient to allow Fisher to reproduce the calculation of the Purchase Price and the AFR Carry Amount. Subject to the satisfaction or waiver by Fisher and the Company of the conditions set forth in Article 6, each closing of the purchase and sale of the Acquired Shares hereunder shall take place on the date set forth in the Closing Notice, which in any event shall be no later than the tenth Business Day after the end of each month (each, a “Closing”) at the offices of the Company located at Two Folsom Street, San Francisco, California 94105, at 9:00 A.M., San Francisco time, or as soon as possible thereafter.

At each Closing:

(a) The Company shall deliver to Seller the Purchase Price by wire transfer of same day or other immediately available funds in accordance with the payment instructions provided to the Company from time to time by Fisher; and

(b) Fisher shall deliver to the Company certificates for the Acquired Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto; provided, if the Acquired Shares are not held by Seller in certificated form, Fisher shall arrange to the Company’s satisfaction to transfer such shares in electronic form to a brokerage account designated in writing by the Company in the Closing Notice.

4

ARTICLE 3

Representations and Warranties of Sellers

Fisher represents and warrants to the Company with respect to any Seller, as of the date hereof and as of the date of each Closing that:

Section 3.1. Due Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby are within the powers, corporate or otherwise, of each Seller and have been duly authorized by all necessary action on the part of each Seller. This Agreement constitutes a valid and binding agreement of Fisher enforceable against Fisher in accordance with its terms.

Section 3.2. Governmental Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any governmental organization, whether state or federal (“Governmental Authority”).

Section 3.3. Noncontravention. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organization documents of each Seller, if applicable, (ii) assuming compliance with the matters referred to in Section 3.2, violate any applicable law, rule, regulation, judgment, injunction, order or decree (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Seller under any provision of any agreement or other instrument binding upon any Seller, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of any Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 3.4. Ownership of Shares. As of the time of each Closing hereunder, Seller will be the beneficial owner of the Acquired Shares to be sold at such Closing, and will transfer and deliver to the Company at each Closing valid title to the Acquired Shares to be sold at such Closing free and clear of any Lien and any other limitation or restriction (including any restriction on the right to sell or otherwise dispose of the Acquired Shares).

ARTICLE 4

Representations and Warranties of the Company

The Company represents and warrants to Fisher as of the date hereof and as of the date of each Closing that:

Section 4.1. Corporate Existence and Power. The Company (i) is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and (ii) has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except with respect to (ii), where the failure to have such corporate powers, governmental licenses, authorizations, permits, consents or approvals would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

5

Section 4.2. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms. This Agreement has been approved by a committee of the Board of Directors of the Company consisting solely of two or more non-employee directors.

Section 4.3. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any Governmental Authority.

Section 4.4. Noncontravention. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 4.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company under any provision of any agreement or other instrument binding upon the Company, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

ARTICLE 5

Covenants of the Company and Fisher

The Company and Fisher agree that:

Section 5.1. Reasonable Commercial Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Company and Fisher will use their reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

6

ARTICLE 6

Conditions To Closing

Section 6.1. Conditions to Obligations of the Company and Fisher. The obligations of the Company and Fisher to consummate each Closing is subject to the satisfaction of the following conditions:

(a) No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of any Closing; and

(b) All actions by or in respect of or filings with any governmental body, agency, official or authority required to permit the consummation of each Closing shall have been taken, made or obtained.

Section 6.2. Conditions to Obligations of the Company. The obligation of the Company to consummate each Closing is subject to the satisfaction (or waiver by the Company) of the following conditions:

(a) Fisher shall have performed in all material respects all of his respective obligations hereunder required to be performed by him on or prior to such Closing; and

(b) The representations and warranties of Fisher hereunder contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

Section 6.3. Conditions to Obligation of Fisher. The obligation of Fisher to consummate each Closing is subject to the satisfaction (or waiver by Fisher) of the following conditions:

(a) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to such Closing; and

(b) The representations and warranties of the Company contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

ARTICLE 7

Termination

Section 7.1. Termination. This Agreement shall terminate:

(a) pursuant to the joint written agreement of the Company and Fisher; or

(b) 15 Business Days after notice by Fisher, on the one hand, or the Company, on the other hand; or

7

(c) pursuant to written notice by the Company, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Fisher set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.2(a) and 6.2(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(d) pursuant to written notice by Fisher, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.3(a) and 6.3(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(e) pursuant to written notice by either Fisher or the Company if there shall be any law or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; or

(f) at the termination or completion of the Program;

provided that with respect to (a) and (b) above, such termination shall not affect the settlement of Acquired Shares in respect of any purchases pursuant to the Program which have occurred or are deemed to have occurred prior to the effective date of the termination of this Agreement.

The party desiring to terminate this Agreement pursuant to clauses (b), (c), (d) or (e) above shall give written notice of such termination to the other party.

ARTICLE 8

Miscellaneous

Section 8.1. Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto shall not survive the termination of this Agreement other than with respect to a Closing for Acquired Shares which follows a termination of the Agreement pursuant to Sections 7.1(a) or (b); provided that the covenants, agreements, representations and warranties contained in Articles 3, 4 and 8 shall survive indefinitely; provided, further, that nothing shall relieve any party for liability at any time with respect to any breach occurring prior to the termination of this Agreement.

8

Section 8.2. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

The Gap, Inc.

Two Folsom Street

San Francisco, CA 94105

Fax: (415) 427-6982 Attn: General Counsel

with a copy to:

Fax: (415) 427-4015

Attn: Treasury Department

if to Fisher, to:

One Maritime Plaza

Suite 1400

San Francisco, CA 94111

Fax: (415) 288-0549

Attn: Donald G. Fisher and Doris F. Fisher

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 P.M. in the place of receipt (as evidenced by confirmation of facsimile or other appropriate transmission receipt) and such day is a business day in San Francisco, California. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in San Francisco, California.

Section 8.3. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by both parties to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. The failure or delay by any party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 8.4. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

Section 8.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign or delegate any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of California (without regard to principles of conflicts of laws).

9

Section 8.7. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in a state or federal court located in San Francisco, California, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.

Section 8.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 8.9. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement is intended to confer upon any Person other than the Company or Seller any rights or remedies hereunder.

Section 8.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 8.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

10

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

THE GAP, INC.
By:	/s/ Sabrina Simmons
	Name:	Sabrina Simmons
	Title:	Executive Vice President and Chief Financial Officer

DONALD G. FISHER (on behalf of himself and on behalf of Sellers)
By:	/s/ Donald G. Fisher
	Name:	Donald G. Fisher

DORIS F. FISHER (on behalf of herself and on behalf of Sellers)
By:	/s/ Doris F. Fisher
	Name:	Doris F. Fisher

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

ANNEX A

ACQUIRED SHARES CALCULATION

The number of Acquired Shares to be purchased from Seller at each Closing shall be equal to:

(a) the quotient of (1) the Seller Ownership Percentage divided by (2) [1 minus the Seller Ownership Percentage]

multiplied by

(b) the number of Shares purchased by the Company pursuant to the Program (open market purchases and otherwise) with respect to the Applicable Month (excluding any Acquired Shares) measured from the first Business Day of the Applicable Month through and including the last Business Day of the Applicable Month;

provided that such number of Acquired Shares for the Applicable Month shall be rounded to the nearest whole Acquired Share.

For purposes of the Acquired Shares calculation, Shares purchased in the open market by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. Shares purchased after the end of the Applicable Month that relate to the Applicable Month shall be deemed to have been purchased during the Applicable Month.

A-1

EX-10.2

Exhibit 10.2

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of February 27, 2008 among The Gap, Inc., a Delaware corporation (the “Company”), John J. Fisher (“Fisher” and, together with any revocable family trust through which Fisher beneficially owns common stock of the Company, “Seller”).

W I T N E S S E T H:

WHEREAS, the Company is authorized to purchase from time to time its Shares (as defined below) pursuant to a share repurchase program authorized by the Board of Directors of the Company on February 14, 2008; and

WHEREAS, the Stock Purchase Agreement, dated August 22, 2007, between the Company and Seller was terminated upon completion of the Company’s prior share repurchase program;

WHEREAS, Fisher is the direct beneficial owner of 25,390,417 Shares of the Company (as defined below), representing approximately 3.46% of the outstanding Shares of the Company as of the date hereof; and

WHEREAS in consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the Company and the Sellers intending to be bound legally, each agree as follows:

ARTICLE 1

Definitions

Section 1.1. Definitions. (a) The following terms, as used herein, have the following meanings:

“AFR” means, for any Business Day, the monthly short-term applicable federal rate, based on a monthly compounding period, published by the Internal Revenue Service for the Applicable Month in which such Business Day occurs.

“AFR Carry Amount” means, for any period, an amount determined at the end of each period that is the sum of all Daily AFR Carry Amounts for such period.

“Average Price” means, for any Applicable Month, the weighted average price, rounded to four decimal points, at which the Company purchased Shares during the Applicable Month pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such Applicable Month divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such Applicable Month; provided that if the Agreement has been terminated in accordance with Section 7.1, the Average Price for any Closing thereafter shall be calculated only through the day immediately prior to the termination date of the Agreement. For the avoidance of doubt, Shares acquired in “open market purchases” shall not include the Acquired Shares.

“Business Day” means (a) for purposes of determining the date of a Closing or Closing Notice, a day on which banks are not required or authorized by law to close in New York City and (b) for all other purposes under this Agreement, a day on which the New York Stock Exchange is open for trading.

“Daily AFR Carry Amount” means, for each day, an amount determined at the end of each period equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds and (b) AFR divided by 360; provided that if such day is not a Business Day, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds through the most recent Business Day of such Applicable Month and (b) AFR in effect as of the most recent Business Day divided by 360; and provided, further, that for any day after the last Business Day of such Applicable Month and prior to the date of Closing with respect to such Applicable Month, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds as of the most recent Business Day and (b) AFR in effect as of the last Business Day of the Applicable Month divided by 360.

“Daily Average Price” means, for any day, the weighted average price at which the Company purchased Shares during the applicable day pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such day divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such day.

“Dividend Adjusted Average Price” means, on any day of an Applicable Month on which all of the following conditions are met: (a) the day is after the public announcement of the dividend, (b) the day precedes an Ex-Dividend Date that occurs during such Applicable Month, and (c) the record date for the shareholders of record entitled to receive such dividend will occur on or before the Closing for such Applicable Month, then Dividend Adjusted Average Price of the Acquired Shares for such day shall be calculated as (i) the Daily Average Price for such day minus (ii) the amount of the dividend per Share which has been declared in respect of the Acquired Shares.

“Ex-Dividend Date” means the date that is two trading days prior to the record date which has been established in connection with the declaration of a dividend in respect of the Acquired Shares or such other date as may be established with respect to the Shares as an “ex-dividend” date by the New York Stock Exchange.

“Implied Daily Acquired Shares” means, for each Business Day of an Applicable Month, the number of Acquired Shares which were attributable to such day’s trading as determined by reference to the number of Shares purchased by the Company pursuant to the Program (other than Acquired Shares) on such Business Day as a percent of the Company’s total purchases pursuant to the Program (other than Acquired Shares) during each Applicable Month determined after the close of trading on the last Business Day of each Applicable Month and prior to the delivery of the Closing Notice relating to the Closing for each Applicable Month. Implied Daily Acquired Shares may result in fractional shares.

2

“Implied Daily Settlement Proceeds” means, for each Business Day of an Applicable Month, the product of (a) the number of Implied Daily Acquired Shares which were deemed to have been acquired on the day that was three trading days prior to such Business Day and (b) the Daily Average Price or Dividend Adjusted Average Price, if applicable, for such prior day.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Program” means the share repurchase program approved on February 14, 2008 authorizing the Company to purchase from time to time Shares up to a maximum aggregate amount (including existing authority) of $1 billion.

“Seller Ownership Percentage” means 3.46%, which represents a percentage equal to (a) the number of Shares directly owned by such Seller as of February 2, 2008, divided by (b) 733,464,398 shares, which represent the Company’s total outstanding basic Shares as of February 2, 2008, multiplied by 100.

“Shares” means the common stock of the Company.

(b) For purposes of the definitions of “Average Price,” “Daily Average Price” and “Implied Daily Acquired Shares”, Shares purchased by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles.

(c) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Acquired Shares	2.1
Applicable Month	2.1
Closing	2.3
Closing Notice	2.3
Governmental Authority	3.2
Purchase Price	2.2

3

ARTICLE 2

Purchase and Sale

Section 2.1. Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, Fisher agrees to sell, transfer, assign and deliver to the Company, and the Company agrees to purchase from Seller, with respect to each calendar month in which the Company purchases Shares pursuant to the Program (the “Applicable Month”), a number of Shares at each Closing calculated in accordance with Annex A hereto (the Shares acquired from Seller, the “Acquired Shares”). In the event that the Agreement is terminated pursuant to Section 7.1, the day immediately prior to the termination date will be deemed to be the last day of the Applicable Month.

Section 2.2. Purchase Price. The aggregate purchase price for the Acquired Shares at each Closing (the “Purchase Price”) shall be equal to the product of (i) the aggregate number of Acquired Shares to be purchased at such Closing multiplied by (ii) the Average Price for the Applicable Month. An interest factor shall be paid along with the Purchase Price for the Acquired Shares equal to the AFR Carry Amount. The Purchase Price shall also include an adjustment to the Average Price of the Acquired Shares, if necessary, to take into account the effect of any dividends or similar distributions relating to the Acquired Shares to be settled for the Applicable Month in the same manner and under the same conditions as provided for in the definition of “Dividend Adjusted Average Price”. The Purchase Price and the AFR Carry Amount shall be paid as provided in Section 2.3.

Section 2.3. Closing. Within five Business Days after the end of each Applicable Month, the Company shall deliver to Fisher a notice (each, a “Closing Notice”) setting forth (i) the date of Closing, (ii) the number of Acquired Shares to be purchased by the Company from Seller pursuant to Section 2.1, (iii) the Purchase Price and the AFR Carry Amount and (iv) the details of the calculation of the Purchase Price and the AFR Carry Amount, sufficient to allow Fisher to reproduce the calculation of the Purchase Price and the AFR Carry Amount. Subject to the satisfaction or waiver by Fisher and the Company of the conditions set forth in Article 6, each closing of the purchase and sale of the Acquired Shares hereunder shall take place on the date set forth in the Closing Notice, which in any event shall be no later than the tenth Business Day after the end of each month (each, a “Closing”) at the offices of the Company located at Two Folsom Street, San Francisco, California 94105, at 9:00 A.M., San Francisco time, or as soon as possible thereafter.

At each Closing:

(a) The Company shall deliver to Seller the Purchase Price by wire transfer of same day or other immediately available funds in accordance with the payment instructions provided to the Company from time to time by Fisher; and

(b) Fisher shall deliver to the Company certificates for the Acquired Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto; provided, if the Acquired Shares are not held by Seller in certificated form, Fisher shall arrange to the Company’s satisfaction to transfer such shares in electronic form to a brokerage account designated in writing by the Company in the Closing Notice.

4

ARTICLE 3

Representations and Warranties of Sellers

Fisher represents and warrants to the Company with respect to any Seller, as of the date hereof and as of the date of each Closing that:

Section 3.1. Due Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby are within the powers, corporate or otherwise, of each Seller and have been duly authorized by all necessary action on the part of each Seller. This Agreement constitutes a valid and binding agreement of Fisher enforceable against Fisher in accordance with its terms.

Section 3.2. Governmental Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any governmental organization, whether state or federal (“Governmental Authority”).

Section 3.3. Noncontravention. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organization documents of each Seller, if applicable, (ii) assuming compliance with the matters referred to in Section 3.2, violate any applicable law, rule, regulation, judgment, injunction, order or decree (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Seller under any provision of any agreement or other instrument binding upon any Seller, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of any Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 3.4. Ownership of Shares. As of the time of each Closing hereunder, Seller will be the beneficial owner of the Acquired Shares to be sold at such Closing, and will transfer and deliver to the Company at each Closing valid title to the Acquired Shares to be sold at such Closing free and clear of any Lien and any other limitation or restriction (including any restriction on the right to sell or otherwise dispose of the Acquired Shares).

ARTICLE 4

Representations and Warranties of the Company

The Company represents and warrants to Fisher as of the date hereof and as of the date of each Closing that:

Section 4.1. Corporate Existence and Power. The Company (i) is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and (ii) has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except with respect to (ii), where the failure to have such corporate powers, governmental licenses, authorizations, permits, consents or approvals would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

5

Section 4.2. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms. This Agreement has been approved by a committee of the Board of Directors of the Company consisting solely of two or more non-employee directors.

Section 4.3. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any Governmental Authority.

Section 4.4. Noncontravention. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 4.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company under any provision of any agreement or other instrument binding upon the Company, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

ARTICLE 5

Covenants of the Company and Fisher

The Company and Fisher agree that:

Section 5.1. Reasonable Commercial Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Company and Fisher will use their reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

6

ARTICLE 6

Conditions To Closing

Section 6.1. Conditions to Obligations of the Company and Fisher. The obligations of the Company and Fisher to consummate each Closing is subject to the satisfaction of the following conditions:

(a) No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of any Closing; and

(b) All actions by or in respect of or filings with any governmental body, agency, official or authority required to permit the consummation of each Closing shall have been taken, made or obtained.

Section 6.2. Conditions to Obligations of the Company. The obligation of the Company to consummate each Closing is subject to the satisfaction (or waiver by the Company) of the following conditions:

(a) Fisher shall have performed in all material respects all of his respective obligations hereunder required to be performed by him on or prior to such Closing; and

(b) The representations and warranties of Fisher hereunder contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

Section 6.3. Conditions to Obligation of Fisher. The obligation of Fisher to consummate each Closing is subject to the satisfaction (or waiver by Fisher) of the following conditions:

(a) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to such Closing; and

(b) The representations and warranties of the Company contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

ARTICLE 7

Termination

Section 7.1. Termination. This Agreement shall terminate:

(a) pursuant to the joint written agreement of the Company and Fisher; or

(b) 15 Business Days after notice by Fisher, on the one hand, or the Company, on the other hand; or

7

(c) pursuant to written notice by the Company, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Fisher set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.2(a) and 6.2(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(d) pursuant to written notice by Fisher, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.3(a) and 6.3(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(e) pursuant to written notice by either Fisher or the Company if there shall be any law or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; or

(f) at the termination or completion of the Program;

provided that with respect to (a) and (b) above, such termination shall not affect the settlement of Acquired Shares in respect of any purchases pursuant to the Program which have occurred or are deemed to have occurred prior to the effective date of the termination of this Agreement.

The party desiring to terminate this Agreement pursuant to clauses (b), (c), (d) or (e) above shall give written notice of such termination to the other party.

ARTICLE 8

Miscellaneous

Section 8.1. Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto shall not survive the termination of this Agreement other than with respect to a Closing for Acquired Shares which follows a termination of the Agreement pursuant to Sections 7.1(a) or (b); provided that the covenants, agreements, representations and warranties contained in Articles 3, 4 and 8 shall survive indefinitely; provided, further, that nothing shall relieve any party for liability at any time with respect to any breach occurring prior to the termination of this Agreement.

8

Section 8.2. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

The Gap, Inc.

Two Folsom Street

San Francisco, CA 94105

Fax: (415) 427-6982

Attn: General Counsel

with a copy to:

Fax: (415) 427-4015

Attn: Treasury Department

if to Fisher, to:

One Maritime Plaza

Suite 1400

San Francisco, CA 94111

Fax: (415) 288-0549

Attn: John J. Fisher

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 P.M. in the place of receipt (as evidenced by confirmation of facsimile or other appropriate transmission receipt) and such day is a business day in San Francisco, California. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in San Francisco, California.

Section 8.3. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by both parties to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. The failure or delay by any party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 8.4. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

Section 8.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign or delegate any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of California (without regard to principles of conflicts of laws).

9

Section 8.7. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in a state or federal court located in San Francisco, California, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.

Section 8.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 8.9. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement is intended to confer upon any Person other than the Company or Seller any rights or remedies hereunder.

Section 8.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 8.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

10

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

THE GAP, INC.
By:	/s/ Sabrina Simmons
	Name:	Sabrina Simmons
	Title:	Executive Vice President and Chief Financial Officer
JOHN J. FISHER (on behalf of himself and on behalf of Sellers)
By:	/s/ John J. Fisher
	Name:	John J. Fisher

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

ANNEX A

ACQUIRED SHARES CALCULATION

The number of Acquired Shares to be purchased from Seller at each Closing shall be equal to:

(a) the quotient of (1) the Seller Ownership Percentage divided by (2) [1 minus the Seller Ownership Percentage]

multiplied by

(b) the number of Shares purchased by the Company pursuant to the Program (open market purchases and otherwise) with respect to the Applicable Month (excluding any Acquired Shares) measured from the first Business Day of the Applicable Month through and including the last Business Day of the Applicable Month;

provided that such number of Acquired Shares for the Applicable Month shall be rounded to the nearest whole Acquired Share.

For purposes of the Acquired Shares calculation, Shares purchased in the open market by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. Shares purchased after the end of the Applicable Month that relate to the Applicable Month shall be deemed to have been purchased during the Applicable Month.

A-1

EX-10.3

Exhibit 10.3

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of February 27, 2008 among The Gap, Inc., a Delaware corporation (the “Company”), Robert J. Fisher (“Fisher” and, together with any revocable family trust through which Fisher beneficially owns common stock of the Company, “Seller”).

W I T N E S S E T H:

WHEREAS, the Company is authorized to purchase from time to time its Shares (as defined below) pursuant to a share repurchase program authorized by the Board of Directors of the Company on February 14, 2008; and

WHEREAS, the Stock Purchase Agreement, dated August 22, 2007, between the Company and Seller was terminated upon completion of the Company’s prior share repurchase program;

WHEREAS, Fisher is the direct beneficial owner of 20,553,163 Shares of the Company (as defined below), representing approximately 2.80% of the outstanding Shares of the Company as of the date hereof; and

WHEREAS in consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the Company and the Sellers intending to be bound legally, each agree as follows:

ARTICLE 1

Definitions

Section 1.1. Definitions. (a) The following terms, as used herein, have the following meanings:

“AFR” means, for any Business Day, the monthly short-term applicable federal rate, based on a monthly compounding period, published by the Internal Revenue Service for the Applicable Month in which such Business Day occurs.

“AFR Carry Amount” means, for any period, an amount determined at the end of each period that is the sum of all Daily AFR Carry Amounts for such period.

“Average Price” means, for any Applicable Month, the weighted average price, rounded to four decimal points, at which the Company purchased Shares during the Applicable Month pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such Applicable Month divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such Applicable Month; provided that if the Agreement has been terminated in accordance with Section 7.1, the Average Price for any Closing thereafter shall be calculated only through the day immediately prior to the termination date of the Agreement. For the avoidance of doubt, Shares acquired in “open market purchases” shall not include the Acquired Shares.

“Business Day” means (a) for purposes of determining the date of a Closing or Closing Notice, a day on which banks are not required or authorized by law to close in New York City and (b) for all other purposes under this Agreement, a day on which the New York Stock Exchange is open for trading.

“Daily AFR Carry Amount” means, for each day, an amount determined at the end of each period equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds and (b) AFR divided by 360; provided that if such day is not a Business Day, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds through the most recent Business Day of such Applicable Month and (b) AFR in effect as of the most recent Business Day divided by 360; and provided, further, that for any day after the last Business Day of such Applicable Month and prior to the date of Closing with respect to such Applicable Month, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds as of the most recent Business Day and (b) AFR in effect as of the last Business Day of the Applicable Month divided by 360.

“Daily Average Price” means, for any day, the weighted average price at which the Company purchased Shares during the applicable day pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such day divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such day.

“Dividend Adjusted Average Price” means, on any day of an Applicable Month on which all of the following conditions are met: (a) the day is after the public announcement of the dividend, (b) the day precedes an Ex-Dividend Date that occurs during such Applicable Month, and (c) the record date for the shareholders of record entitled to receive such dividend will occur on or before the Closing for such Applicable Month, then Dividend Adjusted Average Price of the Acquired Shares for such day shall be calculated as (i) the Daily Average Price for such day minus (ii) the amount of the dividend per Share which has been declared in respect of the Acquired Shares.

“Ex-Dividend Date” means the date that is two trading days prior to the record date which has been established in connection with the declaration of a dividend in respect of the Acquired Shares or such other date as may be established with respect to the Shares as an “ex-dividend” date by the New York Stock Exchange.

“Implied Daily Acquired Shares” means, for each Business Day of an Applicable Month, the number of Acquired Shares which were attributable to such day’s trading as determined by reference to the number of Shares purchased by the Company pursuant to the Program (other than Acquired Shares) on such Business Day as a percent of the Company’s total purchases pursuant to the Program (other than Acquired Shares) during each Applicable Month determined after the close of trading on the last Business Day of each Applicable Month and prior to the delivery of the Closing Notice relating to the Closing for each Applicable Month. Implied Daily Acquired Shares may result in fractional shares.

2

“Implied Daily Settlement Proceeds” means, for each Business Day of an Applicable Month, the product of (a) the number of Implied Daily Acquired Shares which were deemed to have been acquired on the day that was three trading days prior to such Business Day and (b) the Daily Average Price or Dividend Adjusted Average Price, if applicable, for such prior day.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Program” means the share repurchase program approved on February 14, 2008 authorizing the Company to purchase from time to time Shares up to a maximum aggregate amount (including existing authority) of $1 billion.

“Seller Ownership Percentage” means 2.80%, which represents a percentage equal to (a) the number of Shares directly owned by such Seller as of February 2, 2008, divided by (b) 733,464,398 shares, which represent the Company’s total outstanding basic Shares as of February 2, 2008, multiplied by 100.

“Shares” means the common stock of the Company.

(b) For purposes of the definitions of “Average Price,” “Daily Average Price” and “Implied Daily Acquired Shares”, Shares purchased by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles.

(c) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Acquired Shares	2.1
Applicable Month	2.1
Closing	2.3
Closing Notice	2.3
Governmental Authority	3.2
Purchase Price	2.2

3

ARTICLE 2

Purchase and Sale

Section 2.1. Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, Fisher agrees to sell, transfer, assign and deliver to the Company, and the Company agrees to purchase from Seller, with respect to each calendar month in which the Company purchases Shares pursuant to the Program (the “Applicable Month”), a number of Shares at each Closing calculated in accordance with Annex A hereto (the Shares acquired from Seller, the “Acquired Shares”). In the event that the Agreement is terminated pursuant to Section 7.1, the day immediately prior to the termination date will be deemed to be the last day of the Applicable Month.

Section 2.2. Purchase Price. The aggregate purchase price for the Acquired Shares at each Closing (the “Purchase Price”) shall be equal to the product of (i) the aggregate number of Acquired Shares to be purchased at such Closing multiplied by (ii) the Average Price for the Applicable Month. An interest factor shall be paid along with the Purchase Price for the Acquired Shares equal to the AFR Carry Amount. The Purchase Price shall also include an adjustment to the Average Price of the Acquired Shares, if necessary, to take into account the effect of any dividends or similar distributions relating to the Acquired Shares to be settled for the Applicable Month in the same manner and under the same conditions as provided for in the definition of “Dividend Adjusted Average Price”. The Purchase Price and the AFR Carry Amount shall be paid as provided in Section 2.3.

Section 2.3. Closing. Within five Business Days after the end of each Applicable Month, the Company shall deliver to Fisher a notice (each, a “Closing Notice”) setting forth (i) the date of Closing, (ii) the number of Acquired Shares to be purchased by the Company from Seller pursuant to Section 2.1, (iii) the Purchase Price and the AFR Carry Amount and (iv) the details of the calculation of the Purchase Price and the AFR Carry Amount, sufficient to allow Fisher to reproduce the calculation of the Purchase Price and the AFR Carry Amount. Subject to the satisfaction or waiver by Fisher and the Company of the conditions set forth in Article 6, each closing of the purchase and sale of the Acquired Shares hereunder shall take place on the date set forth in the Closing Notice, which in any event shall be no later than the tenth Business Day after the end of each month (each, a “Closing”) at the offices of the Company located at Two Folsom Street, San Francisco, California 94105, at 9:00 A.M., San Francisco time, or as soon as possible thereafter.

At each Closing:

(a) The Company shall deliver to Seller the Purchase Price by wire transfer of same day or other immediately available funds in accordance with the payment instructions provided to the Company from time to time by Fisher; and

(b) Fisher shall deliver to the Company certificates for the Acquired Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto; provided, if the Acquired Shares are not held by Seller in certificated form, Fisher shall arrange to the Company’s satisfaction to transfer such shares in electronic form to a brokerage account designated in writing by the Company in the Closing Notice.

4

ARTICLE 3

Representations and Warranties of Sellers

Fisher represents and warrants to the Company with respect to any Seller, as of the date hereof and as of the date of each Closing that:

Section 3.1. Due Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby are within the powers, corporate or otherwise, of each Seller and have been duly authorized by all necessary action on the part of each Seller. This Agreement constitutes a valid and binding agreement of Fisher enforceable against Fisher in accordance with its terms.

Section 3.2. Governmental Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any governmental organization, whether state or federal (“Governmental Authority”).

Section 3.3. Noncontravention. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organization documents of each Seller, if applicable, (ii) assuming compliance with the matters referred to in Section 3.2, violate any applicable law, rule, regulation, judgment, injunction, order or decree (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Seller under any provision of any agreement or other instrument binding upon any Seller, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of any Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 3.4. Ownership of Shares. As of the time of each Closing hereunder, Seller will be the beneficial owner of the Acquired Shares to be sold at such Closing, and will transfer and deliver to the Company at each Closing valid title to the Acquired Shares to be sold at such Closing free and clear of any Lien and any other limitation or restriction (including any restriction on the right to sell or otherwise dispose of the Acquired Shares).

ARTICLE 4

Representations and Warranties of the Company

The Company represents and warrants to Fisher as of the date hereof and as of the date of each Closing that:

Section 4.1. Corporate Existence and Power. The Company (i) is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and (ii) has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except with respect to (ii), where the failure to have such corporate powers, governmental licenses, authorizations, permits, consents or approvals would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

5

Section 4.2. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms. This Agreement has been approved by a committee of the Board of Directors of the Company consisting solely of two or more non-employee directors.

Section 4.3. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any Governmental Authority.

Section 4.4. Noncontravention. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 4.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company under any provision of any agreement or other instrument binding upon the Company, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

ARTICLE 5

Covenants of the Company and Fisher

The Company and Fisher agree that:

Section 5.1. Reasonable Commercial Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Company and Fisher will use their reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

6

ARTICLE 6

Conditions To Closing

Section 6.1. Conditions to Obligations of the Company and Fisher. The obligations of the Company and Fisher to consummate each Closing is subject to the satisfaction of the following conditions:

(a) No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of any Closing; and

(b) All actions by or in respect of or filings with any governmental body, agency, official or authority required to permit the consummation of each Closing shall have been taken, made or obtained.

Section 6.2. Conditions to Obligations of the Company. The obligation of the Company to consummate each Closing is subject to the satisfaction (or waiver by the Company) of the following conditions:

(a) Fisher shall have performed in all material respects all of his respective obligations hereunder required to be performed by him on or prior to such Closing; and

(b) The representations and warranties of Fisher hereunder contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

Section 6.3. Conditions to Obligation of Fisher. The obligation of Fisher to consummate each Closing is subject to the satisfaction (or waiver by Fisher) of the following conditions:

(a) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to such Closing; and

(b) The representations and warranties of the Company contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

ARTICLE 7

Termination

Section 7.1. Termination. This Agreement shall terminate:

(a) pursuant to the joint written agreement of the Company and Fisher; or

(b) 15 Business Days after notice by Fisher, on the one hand, or the Company, on the other hand; or

7

(c) pursuant to written notice by the Company, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Fisher set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.2(a) and 6.2(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(d) pursuant to written notice by Fisher, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.3(a) and 6.3(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(e) pursuant to written notice by either Fisher or the Company if there shall be any law or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; or

(f) at the termination or completion of the Program;

provided that with respect to (a) and (b) above, such termination shall not affect the settlement of Acquired Shares in respect of any purchases pursuant to the Program which have occurred or are deemed to have occurred prior to the effective date of the termination of this Agreement.

The party desiring to terminate this Agreement pursuant to clauses (b), (c), (d) or (e) above shall give written notice of such termination to the other party.

ARTICLE 8

Miscellaneous

Section 8.1. Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto shall not survive the termination of this Agreement other than with respect to a Closing for Acquired Shares which follows a termination of the Agreement pursuant to Sections 7.1(a) or (b); provided that the covenants, agreements, representations and warranties contained in Articles 3, 4 and 8 shall survive indefinitely; provided, further, that nothing shall relieve any party for liability at any time with respect to any breach occurring prior to the termination of this Agreement.

8

Section 8.2. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

The Gap, Inc.

Two Folsom Street

San Francisco, CA 94105

Fax: (415) 427-6982

Attn: General Counsel

with a copy to:

Fax: (415) 427-4015

Attn: Treasury Department

if to Fisher, to:

One Maritime Plaza

Suite 1400

San Francisco, CA 94111

Fax: (415) 288-0549

Attn: Robert J. Fisher

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 P.M. in the place of receipt (as evidenced by confirmation of facsimile or other appropriate transmission receipt) and such day is a business day in San Francisco, California. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in San Francisco, California.

Section 8.3. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by both parties to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. The failure or delay by any party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 8.4. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

Section 8.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign or delegate any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of California (without regard to principles of conflicts of laws).

9

Section 8.7. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in a state or federal court located in San Francisco, California, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.

Section 8.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 8.9. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement is intended to confer upon any Person other than the Company or Seller any rights or remedies hereunder.

Section 8.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 8.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

10

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

THE GAP, INC.
By:	/s/ Sabrina Simmons
	Name:	Sabrina Simmons
	Title:	Executive Vice President and Chief Financial Officer

ROBERT J. FISHER (on behalf of himself and on behalf of Sellers)
By:	/s/ Robert J. Fisher
	Name:	Robert J. Fisher

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

ANNEX A

ACQUIRED SHARES CALCULATION

The number of Acquired Shares to be purchased from Seller at each Closing shall be equal to:

(a) the quotient of (1) the Seller Ownership Percentage divided by (2) [1 minus the Seller Ownership Percentage]

multiplied by

(b) the number of Shares purchased by the Company pursuant to the Program (open market purchases and otherwise) with respect to the Applicable Month (excluding any Acquired Shares) measured from the first Business Day of the Applicable Month through and including the last Business Day of the Applicable Month;

provided that such number of Acquired Shares for the Applicable Month shall be rounded to the nearest whole Acquired Share.

For purposes of the Acquired Shares calculation, Shares purchased in the open market by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. Shares purchased after the end of the Applicable Month that relate to the Applicable Month shall be deemed to have been purchased during the Applicable Month.

A-1

EX-10.4

Exhibit 10.4

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of February 27, 2008 among The Gap, Inc., a Delaware corporation (the “Company”), William S. Fisher (“Fisher” and, together with any revocable family trust through which Fisher beneficially owns common stock of the Company, “Seller”).

W I T N E S S E T H:

WHEREAS, the Company is authorized to purchase from time to time its Shares (as defined below) pursuant to a share repurchase program authorized by the Board of Directors of the Company on February 14, 2008; and

WHEREAS, the Stock Purchase Agreement, dated August 22, 2007, between the Company and Seller was terminated upon completion of the Company’s prior share repurchase program;

WHEREAS, Fisher is the direct beneficial owner of 17,775,129 Shares of the Company (as defined below), representing approximately 2.42% of the outstanding Shares of the Company as of the date hereof; and

WHEREAS in consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the Company and the Sellers intending to be bound legally, each agree as follows:

ARTICLE 1

Definitions

Section 1.1. Definitions. (a) The following terms, as used herein, have the following meanings:

“AFR” means, for any Business Day, the monthly short-term applicable federal rate, based on a monthly compounding period, published by the Internal Revenue Service for the Applicable Month in which such Business Day occurs.

“AFR Carry Amount” means, for any period, an amount determined at the end of each period that is the sum of all Daily AFR Carry Amounts for such period.

“Average Price” means, for any Applicable Month, the weighted average price, rounded to four decimal points, at which the Company purchased Shares during the Applicable Month pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such Applicable Month divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such Applicable Month; provided that if the Agreement has been terminated in accordance with Section 7.1, the Average Price for any Closing thereafter shall be calculated only through the day immediately prior to the termination date of the Agreement. For the avoidance of doubt, Shares acquired in “open market purchases” shall not include the Acquired Shares.

“Business Day” means (a) for purposes of determining the date of a Closing or Closing Notice, a day on which banks are not required or authorized by law to close in New York City and (b) for all other purposes under this Agreement, a day on which the New York Stock Exchange is open for trading.

“Daily AFR Carry Amount” means, for each day, an amount determined at the end of each period equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds and (b) AFR divided by 360; provided that if such day is not a Business Day, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds through the most recent Business Day of such Applicable Month and (b) AFR in effect as of the most recent Business Day divided by 360; and provided, further, that for any day after the last Business Day of such Applicable Month and prior to the date of Closing with respect to such Applicable Month, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds as of the most recent Business Day and (b) AFR in effect as of the last Business Day of the Applicable Month divided by 360.

“Daily Average Price” means, for any day, the weighted average price at which the Company purchased Shares during the applicable day pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such day divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such day.

“Dividend Adjusted Average Price” means, on any day of an Applicable Month on which all of the following conditions are met: (a) the day is after the public announcement of the dividend, (b) the day precedes an Ex-Dividend Date that occurs during such Applicable Month, and (c) the record date for the shareholders of record entitled to receive such dividend will occur on or before the Closing for such Applicable Month, then Dividend Adjusted Average Price of the Acquired Shares for such day shall be calculated as (i) the Daily Average Price for such day minus (ii) the amount of the dividend per Share which has been declared in respect of the Acquired Shares.

“Ex-Dividend Date” means the date that is two trading days prior to the record date which has been established in connection with the declaration of a dividend in respect of the Acquired Shares or such other date as may be established with respect to the Shares as an “ex-dividend” date by the New York Stock Exchange.

“Implied Daily Acquired Shares” means, for each Business Day of an Applicable Month, the number of Acquired Shares which were attributable to such day’s trading as determined by reference to the number of Shares purchased by the Company pursuant to the Program (other than Acquired Shares) on such Business Day as a percent of the Company’s total purchases pursuant to the Program (other than Acquired Shares) during each Applicable Month determined after the close of trading on the last Business Day of each Applicable Month and prior to the delivery of the Closing Notice relating to the Closing for each Applicable Month. Implied Daily Acquired Shares may result in fractional shares.

2

“Implied Daily Settlement Proceeds” means, for each Business Day of an Applicable Month, the product of (a) the number of Implied Daily Acquired Shares which were deemed to have been acquired on the day that was three trading days prior to such Business Day and (b) the Daily Average Price or Dividend Adjusted Average Price, if applicable, for such prior day.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Program” means the share repurchase program approved on February 14, 2008 authorizing the Company to purchase from time to time Shares up to a maximum aggregate amount (including existing authority) of $1 billion.

“Seller Ownership Percentage” means 2.42%, which represents a percentage equal to (a) the number of Shares directly owned by such Seller as of February 2, 2008, divided by (b) 733,464,398 shares, which represent the Company’s total outstanding basic Shares as of February 2, 2008, multiplied by 100.

“Shares” means the common stock of the Company.

(b) For purposes of the definitions of “Average Price,” “Daily Average Price” and “Implied Daily Acquired Shares”, Shares purchased by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles.

(c) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Acquired Shares	2.1
Applicable Month	2.1
Closing	2.3
Closing Notice	2.3
Governmental Authority	3.2
Purchase Price	2.2

3

ARTICLE 2

Purchase and Sale

Section 2.1. Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, Fisher agrees to sell, transfer, assign and deliver to the Company, and the Company agrees to purchase from Seller, with respect to each calendar month in which the Company purchases Shares pursuant to the Program (the “Applicable Month”), a number of Shares at each Closing calculated in accordance with Annex A hereto (the Shares acquired from Seller, the “Acquired Shares”). In the event that the Agreement is terminated pursuant to Section 7.1, the day immediately prior to the termination date will be deemed to be the last day of the Applicable Month.

Section 2.2. Purchase Price. The aggregate purchase price for the Acquired Shares at each Closing (the “Purchase Price”) shall be equal to the product of (i) the aggregate number of Acquired Shares to be purchased at such Closing multiplied by (ii) the Average Price for the Applicable Month. An interest factor shall be paid along with the Purchase Price for the Acquired Shares equal to the AFR Carry Amount. The Purchase Price shall also include an adjustment to the Average Price of the Acquired Shares, if necessary, to take into account the effect of any dividends or similar distributions relating to the Acquired Shares to be settled for the Applicable Month in the same manner and under the same conditions as provided for in the definition of “Dividend Adjusted Average Price”. The Purchase Price and the AFR Carry Amount shall be paid as provided in Section 2.3.

Section 2.3. Closing. Within five Business Days after the end of each Applicable Month, the Company shall deliver to Fisher a notice (each, a “Closing Notice”) setting forth (i) the date of Closing, (ii) the number of Acquired Shares to be purchased by the Company from Seller pursuant to Section 2.1, (iii) the Purchase Price and the AFR Carry Amount and (iv) the details of the calculation of the Purchase Price and the AFR Carry Amount, sufficient to allow Fisher to reproduce the calculation of the Purchase Price and the AFR Carry Amount. Subject to the satisfaction or waiver by Fisher and the Company of the conditions set forth in Article 6, each closing of the purchase and sale of the Acquired Shares hereunder shall take place on the date set forth in the Closing Notice, which in any event shall be no later than the tenth Business Day after the end of each month (each, a “Closing”) at the offices of the Company located at Two Folsom Street, San Francisco, California 94105, at 9:00 A.M., San Francisco time, or as soon as possible thereafter.

At each Closing:

(a) The Company shall deliver to Seller the Purchase Price by wire transfer of same day or other immediately available funds in accordance with the payment instructions provided to the Company from time to time by Fisher; and

(b) Fisher shall deliver to the Company certificates for the Acquired Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto; provided, if the Acquired Shares are not held by Seller in certificated form, Fisher shall arrange to the Company’s satisfaction to transfer such shares in electronic form to a brokerage account designated in writing by the Company in the Closing Notice.

4

ARTICLE 3

Representations and Warranties of Sellers

Fisher represents and warrants to the Company with respect to any Seller, as of the date hereof and as of the date of each Closing that:

Section 3.1. Due Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby are within the powers, corporate or otherwise, of each Seller and have been duly authorized by all necessary action on the part of each Seller. This Agreement constitutes a valid and binding agreement of Fisher enforceable against Fisher in accordance with its terms.

Section 3.2. Governmental Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any governmental organization, whether state or federal (“Governmental Authority”).

Section 3.3. Noncontravention. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organization documents of each Seller, if applicable, (ii) assuming compliance with the matters referred to in Section 3.2, violate any applicable law, rule, regulation, judgment, injunction, order or decree (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of any Seller under any provision of any agreement or other instrument binding upon any Seller, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of any Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 3.4. Ownership of Shares. As of the time of each Closing hereunder, Seller will be the beneficial owner of the Acquired Shares to be sold at such Closing, and will transfer and deliver to the Company at each Closing valid title to the Acquired Shares to be sold at such Closing free and clear of any Lien and any other limitation or restriction (including any restriction on the right to sell or otherwise dispose of the Acquired Shares).

ARTICLE 4

Representations and Warranties of the Company

The Company represents and warrants to Fisher as of the date hereof and as of the date of each Closing that:

Section 4.1. Corporate Existence and Power. The Company (i) is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and (ii) has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except with respect to (ii), where the failure to have such corporate powers, governmental licenses, authorizations, permits, consents or approvals would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

5

Section 4.2. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms. This Agreement has been approved by a committee of the Board of Directors of the Company consisting solely of two or more non-employee directors.

Section 4.3. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any Governmental Authority.

Section 4.4. Noncontravention. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 4.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company under any provision of any agreement or other instrument binding upon the Company, except with respect to (ii) and (iii), where such violation, consent, action, default or right of termination, cancellation or acceleration would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

ARTICLE 5

Covenants of the Company and Fisher

The Company and Fisher agree that:

Section 5.1. Reasonable Commercial Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Company and Fisher will use their reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

6

ARTICLE 6

Conditions To Closing

Section 6.1. Conditions to Obligations of the Company and Fisher. The obligations of the Company and Fisher to consummate each Closing is subject to the satisfaction of the following conditions:

(a) No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of any Closing; and

(b) All actions by or in respect of or filings with any governmental body, agency, official or authority required to permit the consummation of each Closing shall have been taken, made or obtained.

Section 6.2. Conditions to Obligations of the Company. The obligation of the Company to consummate each Closing is subject to the satisfaction (or waiver by the Company) of the following conditions:

(a) Fisher shall have performed in all material respects all of his respective obligations hereunder required to be performed by him on or prior to such Closing; and

(b) The representations and warranties of Fisher hereunder contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

Section 6.3. Conditions to Obligation of Fisher. The obligation of Fisher to consummate each Closing is subject to the satisfaction (or waiver by Fisher) of the following conditions:

(a) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to such Closing; and

(b) The representations and warranties of the Company contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date.

ARTICLE 7

Termination

Section 7.1. Termination. This Agreement shall terminate:

(a) pursuant to the joint written agreement of the Company and Fisher; or

(b) 15 Business Days after notice by Fisher, on the one hand, or the Company, on the other hand; or

7

(c) pursuant to written notice by the Company, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Fisher set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.2(a) and 6.2(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(d) pursuant to written notice by Fisher, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.3(a) and 6.3(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

(e) pursuant to written notice by either Fisher or the Company if there shall be any law or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; or

(f) at the termination or completion of the Program;

provided that with respect to (a) and (b) above, such termination shall not affect the settlement of Acquired Shares in respect of any purchases pursuant to the Program which have occurred or are deemed to have occurred prior to the effective date of the termination of this Agreement.

The party desiring to terminate this Agreement pursuant to clauses (b), (c), (d) or (e) above shall give written notice of such termination to the other party.

ARTICLE 8

Miscellaneous

Section 8.1. Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto shall not survive the termination of this Agreement other than with respect to a Closing for Acquired Shares which follows a termination of the Agreement pursuant to Sections 7.1(a) or (b); provided that the covenants, agreements, representations and warranties contained in Articles 3, 4 and 8 shall survive indefinitely; provided, further, that nothing shall relieve any party for liability at any time with respect to any breach occurring prior to the termination of this Agreement.

8

Section 8.2. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

The Gap, Inc.

Two Folsom Street

San Francisco, CA 94105

Fax: (415) 427-6982

Attn: General Counsel

with a copy to:

Fax: (415) 427-4015

Attn: Treasury Department

if to Fisher, to:

One Maritime Plaza

Suite 1400

San Francisco, CA 94111

Fax: (415) 288-0549

Attn: William S. Fisher

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 P.M. in the place of receipt (as evidenced by confirmation of facsimile or other appropriate transmission receipt) and such day is a business day in San Francisco, California. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in San Francisco, California.

Section 8.3. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by both parties to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. The failure or delay by any party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 8.4. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

Section 8.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign or delegate any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of California (without regard to principles of conflicts of laws).

9

Section 8.7. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in a state or federal court located in San Francisco, California, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.

Section 8.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 8.9. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement is intended to confer upon any Person other than the Company or Seller any rights or remedies hereunder.

Section 8.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 8.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

10

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

THE GAP, INC.
By:	/s/ Sabrina Simmons
	Name:	Sabrina Simmons
	Title:	Executive Vice President and Chief Financial Officer
WILLIAM S. FISHER (on behalf of himself and on behalf of Sellers)
By:	/s/ William S. Fisher
	Name:	William S. Fisher

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

ANNEX A

ACQUIRED SHARES CALCULATION

The number of Acquired Shares to be purchased from Seller at each Closing shall be equal to:

(a) the quotient of (1) the Seller Ownership Percentage divided by (2) [1 minus the Seller Ownership Percentage]

multiplied by

(b) the number of Shares purchased by the Company pursuant to the Program (open market purchases and otherwise) with respect to the Applicable Month (excluding any Acquired Shares) measured from the first Business Day of the Applicable Month through and including the last Business Day of the Applicable Month;

provided that such number of Acquired Shares for the Applicable Month shall be rounded to the nearest whole Acquired Share.

For purposes of the Acquired Shares calculation, Shares purchased in the open market by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. Shares purchased after the end of the Applicable Month that relate to the Applicable Month shall be deemed to have been purchased during the Applicable Month.

A-1

EX-99.1

Exhibit 99.1

GAP INC. REPORTS FOURTH QUARTER EARNINGS PER SHARE OF $0.35

AND FULL YEAR EARNINGS PER SHARE OF $1.05

SAN FRANCISCO – February 28, 2008 – Gap Inc. (NYSE:GPS) today announced net earnings for the fourth quarter and fiscal year 2007, both of which ended February 2, 2008. Net earnings for the 13 weeks ended February 2, 2008 were $265 million, or $0.35 per share on a diluted basis, compared with $219 million, or $0.27 per share on a diluted basis, for the 14 weeks ended February 3, 2007. Earnings per share on a diluted basis for the 52 weeks ended February 2, 2008 were $1.05, compared with $0.93 for the 53 weeks ended February 3, 2007.

Excluding about $0.07 per diluted share of expenses associated with the company’s cost reduction initiatives and discontinued operation of Forth & Towne, the company’s diluted earnings per share for fiscal year 2007 was $1.12. Please see the reconciliation of diluted earnings per share on a GAAP basis to diluted earnings per share excluding these costs, a non-GAAP financial measure, in the table at the end of this release.

“In 2007, the company made the business decisions and changes necessary to deliver improved earnings for our shareholders,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “While we’re aware of the challenging economic environment, our leadership team is committed to delivering the right product to our customers while we bring a sharp operational discipline to our business priorities. We’ll work tirelessly to reconnect with customers while we continue to improve our earnings results.”

Fourth Quarter Results

Net sales for the 13 weeks ended February 2, 2008 were $4.7 billion. Net sales for the 14 weeks ended February 3, 2007 were $4.9 billion. Due to the 53^rd week in fiscal year 2006, comparable store sales for the fourth quarter of fiscal year 2007 are compared with the 13 weeks ended February 3, 2007. On this basis, the company’s fourth quarter comparable store sales decreased 3 percent compared with a decrease of 7 percent in the fourth quarter of the prior year.

Fiscal Year 2007 Results

Net sales for the 52 weeks ended February 2, 2008 were $15.8 billion. Net sales were $15.9 billion for the 53 weeks ended February 3, 2007. Due to the 53^rd week in fiscal year 2006, fiscal year 2007 comparable store sales are compared with the 52 weeks ended February 3, 2007. On this basis, the company’s fiscal year 2007 comparable store sales decreased 4 percent compared with a decrease of 7 percent for the prior year. The company’s online sales for the fiscal year increased 24 percent to $903 million, compared with $730 million in the prior year.

Sales Results by Division

The following table contains divisional comparable store sales and net sales for the fourth quarter and fiscal year 2007 compared with the prior year.

	Fourth Quarter Comparable Store Sales				Fourth Quarter Net Sales				Fiscal Year Comparable Store Sales				Fiscal Year Net Sales
	2007		2006		2007		2006		2007		2006		2007		2006
Gap North America	-5	%	-8	%	$	1.3 billion	$	1.5 billion	-5	%	-7	%	$	4.5 billion	$	4.9 billion
Banana Republic North America	2	%	3	%	$	764 million	$	766 million	1	%	Flat		$	2.5 billion	$	2.4 billion
Old Navy North America	-5	%	-9	%	$	1.8 billion	$	1.9 billion	-7	%	-8	%	$	6.2 billion	$	6.5 billion
International	-1	%	-6	%	$	510 million	$	497 million	-1	%	-8	%	$	1.6 billion	$	1.5 billion
Gap Inc. Direct (Online)	n/a		n/a		$	289 million	$	252 million	n/a		n/a		$	903 million	$	730 million

Additional Results and 2008 Outlook

Earnings and Effective Tax Rate

The company stated that it expects diluted earnings per share of $1.20 to $1.27 for fiscal year 2008. This guidance takes into account a range of outcomes dependent in part on product acceptance and the volatile macroeconomic environment.

The company’s fourth quarter tax rate was 38.8 percent. The effective tax rate for fiscal year 2007 was 38.3 percent. The company expects the effective tax rate to be about 39 percent for fiscal year 2008.

Cash

The company ended the fourth quarter with $1.9 billion in cash and short-term investments. Fiscal year 2007 free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, was an inflow of $1.4 billion compared with $678 million last year. The increase was driven primarily by lower inventory levels as well as changes in vendor payment terms. The company expects free cash flow to be about $900 million in fiscal year 2008. Please see the reconciliation of free cash flow, a non-GAAP financial measure, to a GAAP financial measure in the table at the end of this release.

Share Repurchases

During the fourth quarter, the company completed its $1.5 billion share repurchase program and repurchased about 30 million shares for a total of $613 million in the quarter.

In a separate press release today, the company announced that its board of directors authorized an additional $1 billion share repurchase program, and that it has entered into purchase agreements with individual members of the Fisher family whose ownership represents approximately 16 percent of the company’s outstanding shares. The company expects that about $158 million (approximately 16 percent) of the $1 billion share repurchase program will be purchased from these Fisher family members.

Dividends

In a separate press release today, the company announced that it intends to increase the annual dividend per share from $0.32 in fiscal year 2007 to $0.34 for fiscal year 2008. The dividend is expected to be paid quarterly in April, July, October, and January.

Margins

Gross margin for fiscal year 2007 was 36.1 percent and increased 60 basis points compared with fiscal year 2006. Operating margin for fiscal year 2007 was 8.3 percent. Operating margin for fiscal year 2008 is expected to be 8.5 percent to 9.5 percent.

Inventory

The company reported that year-over-year inventory per square foot decreased 15 percent at the end of the fourth quarter compared with an increase of 2 percent at the end of the fourth quarter of fiscal year 2006. The company expects the percentage change in inventory per square foot on a year-over-year basis to be down in the low teens at the end of the first quarter of 2008, versus an 8 percent decrease in the first quarter of fiscal year 2007. Please see the financials section on www.gapinc.com for the company’s explanation of numerical range guidance.

Interest Expense

Fiscal year 2007 interest expense was $26 million. The company expects fiscal year 2008 interest expense to be about $20 million.

Depreciation and Amortization

Fiscal year 2007 depreciation and amortization expense was $547 million. The company expects depreciation and amortization expense for fiscal year 2008 to be about $550 million.

Capital Expenditures

Fiscal year 2007 capital spending was $682 million. The company expects to reduce its capital spending to about $500 million in fiscal year 2008.

Real Estate

During fiscal year 2007, the company opened 214 store locations and closed 178 store locations. Openings and closings include 18 store repositions and 45 Old Navy Outlet store conversions, while closings also include 19 Forth & Towne stores. Net square footage at the end of the fourth quarter of 2007 was up 1.8 percent compared with last year.

Excluding 15 store repositions, the company expects to open about 100 store locations and to close about 85 store locations in fiscal year 2008. The store closings are weighted toward Gap brand. Square footage is expected to increase less than half a percent for fiscal year 2008.

Fourth Quarter Store Activity

The following tables contain divisional fourth quarter store openings and closings, and square footage.

	February 2, 2008
	Beginning Q4 Store Locations	Store Locations Opened	Store Locations Closed	Net Store Locations End of Q4	Sq. Ft. (millions)
Gap North America	1,278	4	33	1,249	12.2
Gap Europe	172	4	3	173	1.5
Gap Japan	109	1	—	110	1.1
Old Navy North America	1,062	11	14	1,059	20.0
Banana Republic North America	549	8	2	555	4.7
Banana Republic Japan	21	—	—	21	0.1
Total	3,191	28	52	3,167	39.6
	February 3, 2007
	Beginning Q4 Store Locations	Store Locations Opened	Store Locations Closed	Net Store Locations End of Q4	Sq. Ft. (millions)
Gap North America	1,338	5	50	1,293	12.3
Gap Europe	167	2	1	168	1.5
Gap Japan	102	4	1	105	1.0
Old Navy North America	1,008	8	4	1,012	19.3
Banana Republic North America	514	11	4	521	4.5
Banana Republic Japan	13	—	—	13	0.1
Forth & Towne	15	4	—	19	0.2
Total	3,157	34	60	3,131	38.9

Webcast and Conference Call Information

Evan Price, vice president, Investor Relations, will host a summary of Gap Inc.’s fourth quarter and fiscal year 2007 results in a live conference call and real-time webcast at approximately 5 p.m. Eastern time today. Mr. Price will be joined by Glenn Murphy, Gap Inc. chairman and chief executive officer, and Sabrina Simmons, Gap Inc. executive vice president and chief financial officer.

To access the conference call, please dial (800) 374-0168, or (706) 634-0994 for international callers. The webcast is located on the Conference Calls & Webcasts page in the Financials section of www.gapinc.com. Replay of this event will be made available on (800) GAP-NEWS for four weeks after this announcement and archived on www.gapinc.com.

February Sales

The company will report February sales on March 6, 2008.

Forward-Looking Statements

This press release and related conference call and webcast contain unaudited financial information for the fiscal year and fourth quarter of 2007 and forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding: (i) diluted earnings per share for fiscal year 2008; (ii) effective tax rate for fiscal year 2008; (iii) free cash flow for fiscal year 2008; (iv) net cash provided by operating activities for fiscal year 2008; (v) share repurchases, including repurchases from members of the Fisher family; (vi) dividend per share for fiscal year 2008 and timing of payments; (vii) operating margin for fiscal year 2008; (viii) year-over-year change in inventory per square foot at the end of the first quarter of fiscal year 2008; (ix) interest expense for fiscal year 2008; (x) depreciation and amortization for fiscal year 2008; (xi) capital expenditures for fiscal year 2008; (xii) store openings, closings, repositions, and remodels, and weightings by brand; (xiii) real estate square footage for fiscal year 2008; and (xiv) commitment to distributing excess cash.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following: the risk that adjustments to the company’s unaudited financial statements may be identified through the course of the company’s independent registered public accounting firm completing its integrated audit of the company’s financial statements and financial controls; the risk that additional information may arise during the company’s close process or as a result of subsequent events that would require the company to make adjustments to the financial information; the risk that the adoption of new accounting pronouncements will impact future results; the risk that the company will be unsuccessful in gauging fashion trends and changing consumer preferences; the highly competitive nature of the company’s business in the U.S. and internationally and its dependence on consumer spending patterns, which are influenced by numerous other factors; the risk that the company will be unsuccessful in identifying and negotiating new store locations effectively; the risk that comparable store sales and margins will experience fluctuations; the risk that the company will be unsuccessful in implementing its strategic, operating and people initiatives; the risk that adverse changes in the company’s credit ratings may have a negative impact on its financing costs and structure in future periods; the risk that trade matters, events causing disruptions in product shipments from China and other foreign countries, or IT systems changes may disrupt the company’s supply chain or operations; the risk that acts or omissions by the company’s third party vendors could have a negative impact on the company’s reputation or operations; the risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; the risk that the company does not repurchase some or all of the shares it anticipates purchasing pursuant to its repurchase program; and the risk that either the company or members of the Fisher family terminate the repurchase agreements; any of which could impact net sales, costs and expenses, and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007. Readers should also consult the company’s Quarterly Report on Form 10-Q for the quarter ended November 3, 2007.

Future economic and industry trends that could potentially impact net sales and profitability are difficult to predict. These forward-looking statements are based on information as of February 28, 2008 and the company assumes no obligation 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.

Gap Inc. Copyright Information

All recordings made on 800-GAP-NEWS have been recorded on behalf of Gap Inc. and consist of copyrighted material. They may not be re-recorded, reproduced, retransmitted or rebroadcast without Gap Inc.’s express written permission. Your participation represents your consent to these terms and conditions, which are governed under California law.

Investor Relations:

Evan Price

415-427-2161

Media Relations:

Kris Marubio

415-427-1798

The Gap, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

($ in millions)	February 2, 2008		February 3, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	1,724	$	2,030
Short-term investments		177		570
Restricted cash		38		44
Merchandise inventory		1,575		1,796
Other current assets		572		589
Total current assets		4,086		5,029
Property and equipment, net		3,267		3,197
Other assets		485		318
Total assets	$	7,838	$	8,544
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	138	$	325
Accounts payable		1,006		772
Accrued expenses and other current liabilities		1,259		1,159
Income taxes payable		30		16
Total current liabilities		2,433		2,272
Long-term liabilities:
Long-term debt		50		188
Lease incentives and other liabilities		1,081		910
Total long-term liabilities		1,131		1,098
Total stockholders’ equity		4,274		5,174
Total liabilities and stockholders’ equity	$	7,838	$	8,544

The Gap, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

UNAUDITED

($ and shares in millions except per share amounts)	13 Weeks Ended February 2, 2008			14 Weeks Ended February 3, 2007			52 Weeks Ended February 2, 2008			53 Weeks Ended February 3, 2007
Net sales	$	4,675		$	4,919		$	15,763		$	15,923
Cost of goods sold and occupancy expenses		3,049			3,314			10,071			10,266
Gross profit		1,626			1,605			5,692			5,657
Operating expenses		1,208			1,238			4,377			4,432
Interest expense		5			11			26			41
Interest income		(20	)		(35	)		(117	)		(131	)
Earnings from continuing operations before income taxes		433			391			1,406			1,315
Income taxes		168			161			539			506
Earnings from continuing operations, net of income taxes		265			230			867			809
Loss from discontinued operation, net of income tax benefit		—			(11	)		(34	)		(31	)
Net earnings	$	265		$	219		$	833		$	778
Weighted average number of shares - basic		745			813			791			831
Weighted average number of shares - diluted		749			818			794			836
Basic earnings per share:
Earnings from continuing operations, net of income taxes	$	0.36		$	0.28		$	1.10		$	0.97
Loss from discontinued operation, net of income tax benefit		—			(0.01	)		(0.05	)		(0.03	)
Net earnings per share	$	0.36		$	0.27		$	1.05		$	0.94
Diluted earnings per share:
Earnings from continuing operations, net of income taxes	$	0.35		$	0.28		$	1.09		$	0.97
Loss from discontinued operation, net of income tax benefit		—			(0.01	)		(0.04	)		(0.04	)
Net earnings per share	$	0.35		$	0.27		$	1.05		$	0.93

The Gap, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

($ in millions)	52 Weeks Ended February 2, 2008			53 Weeks Ended February 3, 2007
Cash flows from operating activities:
Net earnings	$	833		$	778
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization (a)		547			530
Share-based compensation		52			54
Tax benefit from exercise of stock options and vesting of service awards		8			25
Excess tax benefit from exercise of stock options and vesting of service awards		(7	)		(23	)
Non-cash and other items		54			11
Deferred income taxes		(59	)		(41	)
Changes in operating assets and liabilities:
Merchandise inventory		252			(97	)
Other current assets and other assets		18			12
Accounts payable		199			(6	)
Accrued expenses and other current liabilities		32			56
Income taxes payable, net of prepaid income taxes and other tax related items		8			(102	)
Lease incentives and other liabilities		144			53
Net cash provided by operating activities		2,081			1,250
Cash flows from investing activities:
Purchases of property and equipment		(682	)		(572	)
Proceeds from sale of property and equipment		11			22
Purchases of short-term investments		(894	)		(1,460	)
Maturities of short-term investments		1,287			1,841
Change in restricted cash		7			11
Change in other assets		(3	)		8
Net cash used for investing activities		(274	)		(150	)
Cash flows from financing activities:
Payments of long-term debt		(326	)		—
Proceeds from share-based compensation		125			190
Purchase of treasury stock		(1,700	)		(1,050	)
Excess tax benefit from exercise of stock options and vesting of service awards		7			23
Cash dividends paid		(252	)		(265	)
Net cash used for financing activities		(2,146	)		(1,102	)
Effect of exchange rate fluctuations on cash		33			(3	)
Net decrease in cash and cash equivalents		(306	)		(5	)
Cash and cash equivalents at beginning of period		2,030			2,035
Cash and cash equivalents at end of period	$	1,724		$	2,030

(a) Depreciation and amortization includes the amortization of lease incentives.

The Gap, Inc.

SEC REGULATION G

UNAUDITED

RECONCILIATION OF DILUTED EARNINGS PER SHARE ON A GAAP BASIS TO DILUTED EARNINGS PER SHARE ON A NON-GAAP BASIS

	52 Weeks Ended February 2, 2008
Diluted earnings per share on a GAAP basis	$	1.05
Add: loss from the discontinued operation of Forth & Towne (a)		0.04
Add: expenses related to the cost reduction initiatives (b)		0.03
Diluted earnings per share on a non-GAAP basis (c)	$	1.12

(a) In fiscal year 2007, the company closed its Forth & Towne store locations. Forth & Towne is presented as a discontinued operation in the accompanying consolidated statements of earnings.

(b) In fiscal year 2007, the company recognized $34 million of expenses on a pre-tax basis relating to its cost reduction initiatives, of which $32 million were operating expenses and $2 million were cost of goods sold and occupancy expenses. The majority of these expenses are related to severance benefits to employees at headquarter locations.

(c) Diluted earnings per share excluding the amounts noted above is a non-GAAP financial measure. We believe this is an important metric as it represents our diluted earnings per share from ongoing operations. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

($ in millions)	52 Weeks Ended February 2, 2008			53 Weeks Ended February 3, 2007
Net cash provided by operating activities	$	2,081		$	1,250
Less: purchases of property and equipment		(682	)		(572	)
Free cash flow (d)	$	1,399		$	678

RECONCILIATION OF EXPECTED NET CASH PROVIDED BY OPERATING ACTIVITIES TO EXPECTED FREE CASH FLOW

($ in millions)	Expected 52 Weeks Ending January 31, 2009
Expected net cash provided by operating activities	$	1,400
Less: expected purchases of property and equipment		(500	)
Expected free cash flow (d)	$	900

(d) Free cash flow is a non-GAAP financial measure. We believe free cash flow is an important metric as it represents a measure of how much cash a company has available after the deduction of capital expenditures as we require regular capital expenditures to build and maintain stores and purchase new equipment to keep the business growing. We use this metric internally, as we believe our sustained ability to increase free cash flow is an important driver of value creation. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.

RECONCILIATION OF OPERATING EXPENSES ON A GAAP BASIS TO OPERATING EXPENSES ON A NON-GAAP BASIS

($ in millions)	52 Weeks Ended February 2, 2008			53 Weeks Ended February 3, 2007
Operating expenses on a GAAP basis	$	4,377		$	4,432
Less: operating expenses related to cost reduction initiatives (b)		(32	)		—
Add: Visa/Mastercard settlement (e)		—			14
Add: unredeemed gift card income (f)		—			31
Operating expenses on a non-GAAP basis (g)	$	4,345		$	4,477

(e) $14 million of income was recognized in fiscal year 2006 relating to the Visa/Mastercard litigation settlement.

(f) $31 million of income was recognized in fiscal year 2006 relating to the change in the company’s estimate of the elapsed time for recording income associated with unredeemed gift cards.

(g) Operating expenses excluding the amounts noted above is a non-GAAP financial measure. It is intended to supplement the user’s overall understanding of our current financial performance and our prospects for the future. We use this metric internally and adjust for these items because they are not essential to evaluating the ongoing operations of our business. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.

EX-99.2

Exhibit 99.2

GAP INC. ANNOUNCES NEW $1 BILLION SHARE REPURCHASE PROGRAM,

PLANS TO INCREASE DIVIDEND FOR 2008

SAN FRANCISCO – FEBRUARY 28, 2008 – Gap Inc. (NYSE: GPS) today announced its Board of Directors approved two decisions that underscore the company’s financial health: an additional $1 billion share repurchase authorization and a plan to increase the annual dividend per share by six percent, from $0.32 in 2007 to $0.34 in 2008. The dividend is expected to be paid quarterly in April, July, October, and January.

“In 2007, we distributed nearly $2 billion dollars to our shareholders in the form of dividends and share repurchases,” said Sabrina Simmons, executive vice president and chief financial officer. “Today’s announcement reinforces our commitment to use the strong cash flow generated by our operations to return excess cash to our shareholders.”

In connection with the share repurchase authorization, Gap Inc. also entered into a second set of agreements with individual members of the Fisher family to repurchase shares. The company expects that about $158 million (approximately 16 percent) of the $1 billion share repurchase program will be purchased from these Fisher family members. The shares will be purchased each month at the same weighted average market price that the company is paying for share repurchases in the open market. Please see the company’s August 23, 2007 press release for information regarding the first set of agreements with members of the Fisher family.

Multiple Fisher family members and entities own approximately 34 percent of Gap Inc. shares, as publicly reported in the company’s 2007 Proxy Statement. The company notes that the overall percentage of the company’s stock held by the Fisher family could fluctuate up or down or remain the same with the agreements announced today. Members of the Fisher family have periodically sold stock since the company’s initial public offering in 1976 as part of their normal investor diversification. With three seats on the company’s Board of Directors, the family remains active supporting the company’s long-term objectives.

During the fourth quarter of fiscal year 2007, the company repurchased about 30 million shares for a total of $613 million, thereby completing a $1.5 billion share repurchase program. Today’s announcement brings the company’s total share repurchase authorizations to $6.75 billion since October 2004.

Forward-Looking Statements

This press release contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding: (i) dividend amounts and timing in fiscal year 2008; and (ii) share repurchases, including repurchases from members of the Fisher family.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company’s actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following: the risk that the company will be unsuccessful in gauging fashion trends and changing consumer preferences; the highly competitive nature of the company’s business in the U.S. and internationally and its dependence on consumer spending patterns, which are influenced by numerous other factors; the risk that the company will be unsuccessful in identifying and negotiating new store locations effectively; the risk that comparable store sales and margins will experience fluctuations; the risk that the company will be unsuccessful in implementing its strategic, operating and people

initiatives; the risk that adverse changes in the company’s credit ratings may have a negative impact on its financing costs and structure in future periods; the risk that trade matters, events causing disruptions in product shipments from China and other foreign countries, or IT systems changes may disrupt the company’s supply chain or operations; the risk that acts or omissions by the company’s third party vendors could have a negative impact on the company’s reputation or operations; the risk that the company will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; the risk that the company does not repurchase some or all of the shares it anticipates purchasing pursuant to its repurchase program; and the risk that either the company or members of the Fisher family terminate the repurchase agreements; any of which could impact net sales, costs and expenses, and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in the company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007. Readers should also consult the company’s quarterly report on Form 10-Q for the quarter ended November 3, 2007.

These forward-looking statements are based on information as of February 28, 2008 and the company assumes no obligation 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.

Investor Relations:

Evan Price

(415) 427-2161

Media Relations:

Kris Marubio

(415) 427-1798