As filed with the Securities and Exchange Commission on April 2, 2002
Registration No. 333-75416
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
-----------------
AMENDMENT NO. 3
TO
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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The Gap, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 5651 94-1697231
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
One Harrison Street
San Francisco, California 94105
(650) 952-4400
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-----------------
Lauri Shanahan, Esq.
Senior Vice President and General Counsel
The Gap, Inc.
Two Folsom Street
San Francisco, California 94105
(650) 952-4400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
-----------------
WITH COPIES TO:
Peter Lillevand, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
(415) 392-1122
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this registration statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated April 2, 2002
PROSPECTUS
[LOGO] Gap Inc.
THE GAP, INC.
Offer to Exchange
8.15% Notes Due December 15, 2005 8.80% Notes Due December 15, 2008
Which Have Been Registered Under Which Have Been Registered Under
the Securities Act of 1933 the Securities Act of 1933
for for
$200,000,000 Outstanding Unregistered $500,000,000 Outstanding Unregistered
8.15% Notes Due December 15, 2005 8.80% Notes Due December 15, 2008
The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2002, unless extended.
-----------------
Material Terms of the Exchange Offer:
. We are offering to exchange $200,000,000 aggregate principal amount of
registered 8.15% notes due December 15, 2005 for $200,000,000 aggregate
principal amount of unregistered 8.15% notes due December 15, 2005 and
$500,000,000 aggregate principal amount of registered 8.80% notes due
December 15, 2008 for $500,000,000 aggregate principal amount of
unregistered 8.80% notes due December 15, 2008.
. The terms of the new notes are identical in all material respects to
the terms of the old notes, except that the registration rights and
related penalty provisions for failure to register the notes and the
transfer restrictions applicable to the original notes are not
applicable to the new notes.
. Subject to the satisfaction or waiver of specified conditions, Gap will
exchange the new notes for all old notes that are validly tendered and
not withdrawn prior to the expiration of the exchange offer.
. The exchange of old notes for new notes in the exchange offer generally
will not be a taxable event for U.S. federal income tax purposes. See
"U.S. Federal Income Tax Consequences."
. We will not receive any proceeds from the exchange offer.
Investing in the new notes involves risks. See "Risk Factors" beginning on
page 9 of this prospectus for a discussion of certain factors that you should
consider in connection with this exchange offer and an investment in the new
notes.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or the accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
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The date of this prospectus is , 2002.
TABLE OF CONTENTS
Where You Can Find More Information.................................. ii
Forward-Looking Statements........................................... iii
Summary.............................................................. 1
Risk Factors......................................................... 9
Use of Proceeds...................................................... 11
Ratio of Earnings to Fixed Charges................................... 11
The Exchange Offer................................................... 11
Description of the New Notes......................................... 20
U.S. Federal Income Tax Consequences................................. 30
Plan of Distribution................................................. 33
Legal Matters........................................................ 34
Experts.............................................................. 34
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to
provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. You should
assume that the information contained or incorporated by reference in this
prospectus is accurate as of the date on the front cover of this prospectus or
the date of the document incorporated by reference. Our business, financial
condition, results of operations and prospects may have changed since then. We
are not making an offer to sell the securities offered by this prospectus in
any jurisdiction where the offer or sale is not permitted.
i
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference room in
Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov. Reports, proxy material and other
information about us can also be inspected at the offices of the New York and
Pacific Stock Exchanges.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below as well as all future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, until this offering is completed:
(a) Our Annual Report on Form 10-K for the fiscal year ended February 2,
2002; and
(b) Our Current Reports on Form 8-K filed February 27, 2002, February 28,
2002, March 7, 2002, March 11, 2002 and March 22, 2002.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
The Gap, Inc.
Two Folsom Street
San Francisco, CA 94105
Attention: Investor Relations
Telephone: 1-800-GAP-NEWS
If you would like to request documents, please do so no later than five
business days before the exchange offer expires on , 2002.
The exchange offer is not being made to, nor will we accept surrenders for
exchange from holders of old notes in any jurisdiction in which the exchange
offer or the acceptance thereof would not be in compliance with the securities
or blue sky laws of that jurisdiction.
ii
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated herein by reference
contain certain forward-looking statements which reflect our current view with
respect to future events and financial performance. Whenever used, the words
"expect," "plan," "anticipate," "believe," "may" and similar expressions
identify forward-looking statements.
Any such forward-looking statements are subject to risks and uncertainties
and our future results of operations could differ materially from historical
results or current expectations. Some of these risks are discussed below under
the caption "Risk Factors" and in Item 1 of our Annual Report on Form 10-K for
the fiscal year ended February 2, 2002, which is incorporated herein by
reference, and include, without limitation, ongoing competitive pressures in
the apparel industry, risks associated with challenging international retail
environments, changes in the level of consumer spending, including as a result
of the September 11th terrorist attack and its aftermath, or preferences in
apparel, trade restrictions and political or financial instability in countries
where our goods are manufactured and/or other factors that may be described in
our filings with the SEC. Future economic and industry trends that could
potentially impact revenue and profitability are difficult to predict.
We assume no obligation to publicly update or revise our forward-looking
statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized.
iii
SUMMARY
This summary highlights all material information from the prospectus. It
may not contain all of the information that is important to you. References in
this prospectus to "Gap," "we," "us" and "our" refer to The Gap, Inc. and its
subsidiaries. We urge you to read and review carefully this entire prospectus
and the other documents to which it refers to fully understand the terms of the
new notes and the exchange offer.
Our Company
We are a global specialty retailer operating stores selling casual apparel,
personal care and other accessories for men, women and children under the Gap,
Banana Republic and Old Navy brands. As of March 2, 2002, we operated 4,176
stores in the United States, Canada, the United Kingdom, France, Germany and
Japan.
We design virtually all of our products, which in turn are manufactured by
independent sources, and sell them under our brands in the following store
formats:
Gap. Founded in 1969, Gap stores offer extensive selections of
classically-styled, high quality, casual apparel at moderate price points.
Products range from wardrobe basics, such as denim, khakis and T-shirts, to
fashion apparel, accessories and personal care products for men and women
aged teen through adult. We entered the children's apparel market with the
introduction of GapKids in 1986 and babyGap in 1989. These stores offer
casual basics, outerwear, shoes and other accessories in the tradition of
Gap style and quality for children aged newborn through teen. We launched
GapBody in 1998 offering men's and women's underwear, sleepwear and
personal care products. As of March 2, 2002, we operated a total of 2,926
Gap brand stores.
Banana Republic. Acquired in 1983 with two stores, Banana Republic now
offers sophisticated, fashionable collections of dress-casual and tailored
clothing and accessories for men and women at higher price points than Gap.
Banana Republic products range from clothing, including intimate apparel,
to personal care products and home products. As of March 2, 2002, we
operated 442 Banana Republic stores.
Old Navy. We launched Old Navy in 1994 to address the market for
value-priced family apparel. Old Navy offers broad selections of apparel,
shoes and accessories for adults, children and infants as well as other
items, including personal care products, in an innovative, exciting
shopping environment. As of March 2, 2002, we operated 808 Old Navy stores.
We established Gap Online, a web-based store located at www.gap.com, in
1997. GapKids and babyGap web-based stores, located at www.gapkids.com and
www.babygap.com, were established in 1998. Products comparable to those carried
in Gap, GapKids and babyGap stores can be purchased on-line. In addition, a
line of maternity apparel is available at Gap Online. Banana Republic
introduced a catalog format in 1998 and Banana Republic Online, a web-based
store located at www.bananarepublic.com, in 1999. Both of the new Banana
Republic formats offer clothing and accessories comparable to those carried in
the store collections. In 1999, we established Old Navy Online, a promotional
website located at www.oldnavy.com, and began operating Old Navy Online as a
web-based store in 2000. Our online and catalog businesses are offered as an
extension of our store experience and are intended to strengthen our
relationship with our customers.
Our executive offices are located at Two Folsom Street, San Francisco,
California 94105, and our telephone number is (650) 952-4400.
1
Recent Developments
The estimates and expectations set forth below are forward-looking
statements and are necessarily subject to significant risks and uncertainties.
See "Forward-Looking Statements."
Financial Results
On March 7, 2002, we reported sales of $720 million for the four-week
period ended March 2, 2002, compared with sales of $784 million for the same
period ended March 3, 2001, which represents an 8% decrease. Our comparable
store sales for February 2002 were down 17%, compared to a 11% decrease in
February 2001.
On February 26, 2002, we reported net sales decreased 11% to $4.1 billion
for the fourth quarter (13-week period) ended February 2, 2002, compared to
$4.6 billion for the fourth quarter (14-week period) ended February 3, 2001.
Our fourth quarter comparable store sales decreased 16% versus a 6% decrease
during the same period last year.
We also reported a net loss of $34 million, or $0.04 per share, for the
fourth quarter ended February 2, 2002, driven by a decline in gross margins and
weaker sales. These results included a $15 million after-tax charge for
sub-lease losses at our headquarters facilities in California and the planned
closures of distribution centers in Kentucky and Holland. Net earnings were
$272 million for the fourth quarter ended February 3, 2001, or $0.31 per share.
Net sales for the 52-week fiscal 2001 rose 1% to $13.8 billion, compared
with $13.7 billion for the 53-week fiscal 2000. Comparable store sales for
fiscal 2001 decreased 13% versus a 5% decrease in fiscal 2000.
For fiscal 2001, we reported a net loss of $8 million, or $0.01 per share,
including the previously announced tax charge of $131 million and after-tax
charges of $73 million for cancelled product orders, workforce reductions,
sub-lease losses and distribution center closures. Net earnings were
$877 million, or $1.00 per share, for fiscal 2000. For further information on
our financial results, you should read our Annual Report on Form 10-K for the
fiscal year ended February 2, 2002.
Bank Facility
In March 2002, we replaced our existing $1.45 billion bank facilities, $1.3
billion of which was scheduled to expire in June 2002, with a new $1.4 billion
secured revolving credit facility. The new facility is secured and contains
financial and other covenants, including limitations on capital expenditures,
liens, cash dividends and investments, and maintenance of certain financial
ratios, including a fixed-charge coverage ratio not less than 1.2:1 and 1.4:1
for fiscal 2002 and fiscal 2003, respectively, and an asset-coverage ratio of
not less than 1.75:1. The new facility will be used for general corporate
purposes, including trade letters of credit issuance and advances.
Convertible Note Offering
In March 2002, we issued $1.38 billion aggregate principal amount of 5.75%
senior convertible notes due March 15, 2009 at par and received the net
proceeds thereof in cash. Interest is payable semi-annually on March 15 and
September 15 of each year, commencing on September 15, 2002. The notes are
convertible, unless previously redeemed or repurchased, at the option of the
holder at any time prior to maturity, into shares of our common stock at a
conversion price of $16.12 per share, subject to adjustment in certain events,
for a total of approximately 85,607,940 shares.
2
Credit Ratings
On January 14, 2002, Moody's Investors Service reduced our long-term senior
unsecured corporate credit ratings from Baa2 to Baa3. On February 14, 2002,
Moody's reduced our long and short-term senior unsecured corporate credit
ratings from Baa3 to Ba2 and from Prime-3 to Not Prime, respectively, with a
negative outlook on our long-term ratings, and Standard & Poor's Rating Service
reduced our long and short-term corporate credit ratings from BBB+ to BB+ and
from A-2 to B, respectively, with a stable outlook on our long-term ratings. On
February 27, 2002, Moody's reduced our long-term senior unsecured corporate
credit ratings from Ba2 to Ba3 and stated that its outlook on our long-term
ratings was stable. As a result of these recent downgrades, effective June 15,
2002, the interest rate payable by us on the 2005 notes is subject to increase
to 9.90% per annum and the interest rate payable by us on the 2008 notes is
subject to increase to 10.55% per annum.
These ratings reflect only the views of the rating agencies at a particular
time and are not recommendations to buy, sell or hold the notes. These ratings
can be revised upward or downward or withdrawn at any time by the assigning
rating agency if it decides the circumstances warrant that change.
3
Summary of the Terms of the Exchange Offer
General..................... On November 21, 2001, we completed a private
offering of the old notes, which consists of $200
million aggregate principal amount of our 8.15%
Notes due December 15, 2005 and $500 million
aggregate principal amount of our 8.80% Notes due
December 15, 2008. In connection with the private
offering, we entered into a registration rights
agreement in which we agreed, among other things,
to deliver this prospectus to you and to complete
an exchange offer for the old notes.
The exchange offer.......... We are offering to exchange $1,000 principal
amount of our registered 8.15% Notes due December
15, 2005, which we refer to as the "new 2005
notes," for each $1,000 principal amount of our
unregistered 8.15% Notes due December 15, 2005,
which we refer to as the "old 2005 notes."
We are also offering to exchange $1,000 principal
amount of our registered 8.80% Notes due December
15, 2008, which we refer to as the "new 2008
notes," for each $1,000 principal amount of our
unregistered 8.80% Notes due December 15, 2008,
which we refer to as the "old 2008 notes."
We sometimes refer to the old 2005 notes and the
old 2008 notes together as the "old notes"; the
new 2005 notes and the new 2008 notes together as
the "new notes"; and the new notes and the old
notes together as the "notes." Currently,
$700 million principal amount of old notes are
outstanding.
The terms of the new 2005 notes and new 2008
notes are identical in all material respects to
the terms of the old 2005 notes and old 2008
notes, respectively, except that the registration
rights and related penalty provisions for failure
to register the notes and the transfer
restrictions applicable to the old notes are not
applicable to the new notes.
Old notes may be tendered only in $1,000
increments. Subject to the satisfaction or waiver
of specified conditions, we will exchange the new
2005 notes and new 2008 notes for all old 2005
notes and old 2008 notes, respectively, that are
validly tendered and not withdrawn prior to the
expiration of the exchange offer. We will cause
the exchange to be effected promptly after the
expiration of the exchange offer. See "The
Exchange Offer--Terms of the Exchange Offer."
Upon completion of the exchange offer, there may
be no market for the old notes and you may have
difficulty selling them. See "Risk Factors--If an
active trading market does not develop for the
new notes, you may be unable to sell the new
notes or to sell them at a price you deem
sufficient."
4
Expiration date............. The exchange offer will expire at 5:00 p.m., New
York City time, on , 2002 unless we extend
it. In that case, the phrase "expiration date"
will mean the latest date and time to which we
extend the exchange offer. We expect that the
expiration date will not be later than , 2002.
Procedures for participating
in the exchange offer..... If you wish to participate in the exchange offer,
you must either:
. complete, sign and date an original or faxed
letter of transmittal in accordance with the
instructions in the letter of transmittal
accompanying this prospectus; or
. arrange for The Depository Trust Company to
transmit required information to the exchange
agent in connection with a book-entry transfer.
Then you must mail, fax or deliver this
documentation together with the old notes you
wish to exchange and any other required
documentation to The Bank of New York, which is
acting as the exchange agent for the exchange
offer. The exchange agent's address appears on
the letter of transmittal. By tendering your old
notes in either of these manners, you will
represent to and agree with us that:
. you are acquiring the new notes in the ordinary
course of your business;
. you are not engaged in, and you do not intend
to engage in, the distribution (within the
meaning of the Securities Act) of the new notes;
. you have no arrangement or understanding with
anyone to participate in a distribution of the
new notes; and
. you are not an "affiliate," as defined in Rule
405 under the Securities Act, of Gap.
See "The Exchange Offer--Procedures for
Tendering."
If you are a broker-dealer that will receive new
notes for your own account in exchange for old
notes that you acquired as a result of your
market-making or other trading activities, you
will be required to acknowledge in the letter of
transmittal that you will deliver a prospectus in
connection with any resale of these new notes.
Resale of new notes......... We believe that you may resell and transfer your
new notes without registering them under the
Securities Act and delivering a prospectus, if
you can make the representations that appear
above under the heading "--Procedures for
participating in the exchange offer." Our belief
is based on interpretations of the SEC expressed
in the SEC's no-action letters to other issuers
in exchange offers like ours.
5
We cannot guarantee that the SEC would make a
similar decision about this exchange offer. If
our belief is wrong, or if you cannot truthfully
make the representations appearing above, and you
transfer any new note issued to you in the
exchange offer without meeting the registration
and prospectus delivery requirements of the
Securities Act, or without an exemption from
these requirements, you could incur liability
under the Securities Act. We are not indemnifying
you for any liability under the Securities Act. A
broker-dealer can only resell or transfer new
notes if it delivers a prospectus in connection
with the resale or transfer.
Special procedures for
beneficial owners......... If your old notes are held through a broker,
dealer, commercial bank, trust company or other
nominee and you wish to surrender your old notes,
you should contact your intermediary promptly and
instruct it to surrender the old notes on your
behalf.
Guaranteed delivery
procedures................ If you cannot meet the expiration date deadline,
or you cannot deliver your old notes, the letter
of transmittal or any other documentation on
time, or the procedures for book-entry transfer
cannot be completed on time, then you must
surrender your old notes according to the
guaranteed delivery procedures appearing below
under "The Exchange Offer--Guaranteed Delivery
Procedures."
Acceptance of your old notes
and delivery of the new
notes..................... We will accept for exchange any and all old notes
that are surrendered in the exchange offer prior
to the expiration date if you comply with the
procedures of the offer. The new notes will be
delivered on the earliest practicable date after
the expiration date.
Withdrawal rights........... You may withdraw the surrender of your old notes
at any time prior to the expiration date.
Appraisal rights............ You will not be entitled to any appraisal or
dissenters' rights nor any other right to seek
monetary damages in court in connection with the
exchange offer. See "The Exchange Offer--Terms of
the Exchange Offer."
U.S. federal income tax
consequences.............. The exchange of old notes for new notes in the
exchange offer generally will not be a taxable
event for U.S. federal income tax purposes. See
"U.S. Federal Income Tax Consequences."
Exchange agent.............. The Bank of New York is serving as the exchange
agent in connection with the exchange offer. The
Bank of New York also serves as trustee under the
indenture that governs the notes.
6
Summary of the Terms of the New Notes
The following is a summary of the terms of the new notes. The terms of the
new notes are identical in all material respects to the terms of the old notes,
except that the registration rights and related penalty provisions for failure
to register the notes and the transfer restrictions applicable to the old notes
are not applicable to the new notes. The new notes will evidence the same debt
as the old notes. The new notes and the old notes will be governed by the same
indenture.
Exchange notes offered...... $200,000,000 aggregate principal amount of 8.15%
due December 15, 2005 (the "new 2005 notes").
$500,000,000 aggregate principal amount of 8.80%
due December 15, 2008 (the "new 2008 notes").
Interest.................... We will pay interest on the notes initially, in
the case of the new 2005 notes, at the annual
rate of 8.15%, and, in the case of the new 2008
notes, at the annual rate of 8.80%, in each case
payable semiannually in arrears on June 15 and
December 15 of each year, beginning June 15,
2002. The interest rates on the new notes will be
subject to adjustment as described under
"Description of the New Notes--Interest Rate
Adjustment."
Interest rate adjustment.... The interest rate payable on each series of the
new notes will be subject to adjustment from time
to time as described under "Description of the
New Notes--Interest Rate Adjustment" if either
Moody's or Standard & Poor's reduces the rating
ascribed to the notes below Baa2, in the case of
Moody's, or below BBB+, in the case of Standard &
Poor's.
Optional redemption......... We may redeem the new notes of either series, in
whole or in part, at our option at any time at a
redemption price equal to the greater of:
. 100% of the principal amount of such new notes;
or
. the sum of the present values of the remaining
scheduled payments of principal and interest
thereon, not including the portion of any such
payments of interest accrued as of the
redemption date, discounted to the redemption
date on a semiannual basis at the "adjusted
treasury rate," as such term is defined in
"Description of the New Notes--Optional
Redemption." In each case, we must also pay
accrued and unpaid interest, including the
additional interest payable in the event of a
credit rating change, if any, to the redemption
date. See "Description of the New
Notes--Optional Redemption" and "--Interest
Rate Adjustment."
Global note; Book-entry
system.................... The new notes will be issued only in fully
registered form without interest coupons and in
minimum denominations of $1,000. Each series of
the new notes will be evidenced by one or more
global notes deposited with the trustee for the
new notes, as custodian for DTC. Beneficial
interests in the global
7
notes will be shown on, and transfers of those
beneficial interests can only be made through,
records maintained by DTC and its participants.
See "Description of the New Notes--Book-Entry,
Delivery and Form."
Use of proceeds............. We will not receive any proceeds from the
exchange offer.
Events of default........... The following will be events of default for
either series of notes under the indenture for
the notes:
. we fail to pay any interest, including
additional interest, on any new note of that
series when due and that default continues for
30 days;
. we fail to pay principal or premium, if any, on
any new note of that series when due;
. we fail to perform, or breach, any covenant or
warranty in the indenture or in the new notes
of that series and that failure continues for
60 days after written notice as provided in the
indenture;
. we or any of our subsidiaries fail to pay when
due, either at its maturity or upon
acceleration thereof, any indebtedness for
money borrowed equal to $25 million or more and
such indebtedness is not discharged, or the
acceleration is not rescinded or annulled,
within 10 business days after written notice as
provided in the indenture; or
. events of bankruptcy, insolvency or
reorganization. See "Description of the New
Notes--Events of Default."
Governing law............... The indenture is, and the new notes will be,
governed by the laws of the State of New York.
8
RISK FACTORS
You should read and carefully consider the following risk factors as well
as the other information contained in or incorporated by reference in this
prospectus before deciding to surrender your old notes in exchange for new
notes in this exchange offer.
If you fail to exchange properly your old notes for new notes, you will
continue to hold notes subject to transfer restrictions.
We will only issue new notes in exchange for old notes that you timely and
properly tender. Therefore, you should allow sufficient time to ensure timely
delivery of the old notes and you should carefully follow the instructions on
how to tender your old notes set forth under "The Exchange Offer--Procedures
for Tendering" and in the letter of transmittal that you will receive with this
prospectus. Neither we nor the exchange agent are required to tell you of any
defects or irregularities with respect to your tender of old notes.
If you do not exchange your old notes for new notes in the exchange offer,
the old notes you hold will continue to be subject to the existing transfer
restrictions. In general, you may not offer or sell the old notes except under
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not plan to register old notes and upon
completion of the exchange offer you will not be entitled to any rights to have
your old notes registered under the Securities Act. If you continue to hold any
old notes after the exchange offer is completed, you may have trouble selling
them because of the restrictions on transfer of the old notes.
Recent changes in our credit ratings may have a negative impact on our
financing costs and structure in future periods.
On January 14, 2002, Moody's Investors Service reduced our long-term senior
unsecured corporate credit ratings from Baa2 to Baa3. On February 14, 2002,
Moody's reduced our long and short-term senior unsecured corporate credit
ratings from Baa3 to Ba2 and from Prime-3 to Not Prime, respectively, with a
negative outlook on our long-term ratings, and Standard & Poor's Rating Service
reduced our long and short-term corporate credit ratings from BBB+ to BB+ and
from A-2 to B, respectively, with a stable outlook on our long-term ratings. On
February 27, 2002, Moody's reduced our long-term senior unsecured corporate
credit ratings from Ba2 to Ba3 and stated that its outlook on our long-term
ratings was stable. As a result of the recent downgrades in our long-term
credit ratings, effective June 15, 2002, the interest rate payable by us on the
2005 notes is subject to increase to 9.90% per annum and the interest rate
payable by us on the 2008 notes is subject to increase to 10.55% per annum. Any
further downgrades in our long-term credit ratings by these rating agencies
would result in further increases in the interest rates payable by us on the
notes. As a result of the downgrades in our short-term credit ratings, we no
longer have meaningful access to the commercial paper market. In addition, we
expect both the recent, and any future, lowering of the ratings on our debt to
result in reduced access to the capital markets and higher interest costs on
future financings.
If an active trading market does not develop for the new notes, you may be
unable to sell the new notes or to sell them at a price you deem sufficient.
The new notes will be new securities for which there is no established
trading market. We do not intend to list the new notes on any exchange. We
cannot give you any assurance as to:
. the liquidity of any trading market that may develop;
. the ability of holders to sell their new notes; or
. the price at which holders would be able to sell their new notes.
9
Even if a trading market develops, the new notes may trade at higher or
lower prices than their principal amount or purchase price, depending on many
factors, including:
. prevailing interest rates;
. the number of holders of the notes;
. the interest of securities dealers in making a market for the notes;
. the market for similar notes; and
. our financial performance.
We understand that the initial purchasers of the old notes presently intend
to make a market in the notes. However, they are not obligated to do so and may
discontinue making a market in the notes at any time without notice. Finally,
if a large number of holders of old notes do not tender old notes or tender old
notes improperly, the limited amount of new notes that would be issued and
outstanding after we complete the exchange offer could adversely affect the
development of a market for the new notes.
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement that we entered into relating to the old notes.
We will not receive any proceeds from the exchange offer. You will receive, in
exchange for old notes tendered by you in the exchange offer, new notes in like
principal amount. The old notes surrendered in exchange for the new notes will
be retired and cancelled and cannot be reissued. Accordingly, the issuance of
the new notes will not result in any increase of our outstanding debt.
We received approximately $694 million of net proceeds from the sale of the
old notes. We will use the net proceeds from the sale of the old notes for
general corporate purposes including the possible repayment of short-term
indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated:
Fiscal Year Ended
-----------------------------------------------------------
January 31, January 30, January 29, February 3, February 2,
1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- -----------
4.01 4.79 5.32 3.67 1.39
For purposes of computing the ratios of earnings to fixed charges, earnings
consist of income before taxes plus fixed charges (less capitalized interest),
and fixed charges consist of interest expense, capitalized interest and the
portion of rental expense under operating leases representative of an interest
factor.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
We sold the old notes on November 21, 2001 to Goldman, Sachs & Co., J.P.
Morgan Securities Inc. and certain other initial purchasers pursuant to a
purchase agreement. These initial purchasers subsequently sold the old notes to:
. "qualified institutional buyers" ("QIBs"), as defined in Rule 144A
under the Securities Act, in reliance on Rule 144A; and
. persons in offshore transactions in reliance on Regulation S under the
Securities Act.
As a condition to the initial sale of the old notes, we entered into a
registration rights agreement with the initial purchasers. Pursuant to the
registration rights agreement, we agreed to:
. file with the SEC by February 19, 2002 a registration statement under
the Securities Act with respect to the issuance of the new notes in an
exchange offer; and
. use our best efforts to cause the registration statement to become
effective under the Securities Act on or before May 20, 2002.
We agreed to issue and exchange the new notes for all old notes validly
tendered and not validly withdrawn prior to the expiration of the exchange
offer. A copy of the registration rights agreement has been filed as an exhibit
to the registration statement which includes this prospectus. The filing of the
registration statement is intended to satisfy some of our obligations under the
registration rights agreement and the purchase agreement.
The term "holder" with respect to the exchange offer means any person in
whose name old notes are registered on the trustee's books or any other person
who has obtained a properly completed bond power from the registered holder, or
any person whose old notes are held of record by The Depository Trust Company,
which we refer to as the "Depositary" or "DTC," who desires to deliver the old
notes by book-entry transfer at DTC.
Terms of the Exchange Offer
Based on the terms and conditions in this prospectus and in the letter of
transmittal, we will issue $1,000 principal amount of new 2005 notes in
exchange for each $1,000 principal amount of outstanding old 2005 notes and
$1,000 principal amount of new 2008 notes in exchange for each $1,000 principal
amount of outstanding old 2008 notes properly surrendered pursuant to the
exchange offer and not withdrawn prior to the expiration date. Old notes may be
surrendered only in integral multiples of $1,000. The form and terms of the new
notes are the same as the form and terms of the old notes except that:
. the new notes will be registered under the Securities Act and will not
bear legends restricting the transfer of the new notes; and
. holders of the new notes will not be entitled to any of the
registration rights and related penalty provisions for failure to
register the notes of holders of old notes under the registration
rights agreement.
The new notes will evidence the same indebtedness as the old notes, which
they replace, and will be issued under, and be entitled to the benefits of, the
same indenture, which authorized the issuance of the old notes. As a result,
the new 2005 notes and old 2005 notes will be treated as a single class of debt
securities under the indenture, and the new 2008 notes and old 2008 notes will
be treated as a single class of debt securities under the indenture.
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As of the date of this prospectus, $200 million in aggregate principal
amount of the old 2005 notes is outstanding, and $500 million in aggregate
principal amount of the old 2008 notes is outstanding. All of it is registered
in the name of Cede & Co., as nominee for DTC. Solely for reasons of
administration, we have fixed the close of business on , 2002 as the
record date for the exchange offer for purposes of determining the persons to
whom this prospectus and the letter of transmittal will be mailed initially.
There will be no fixed record date for determining holders of the old notes
entitled to participate in this exchange offer.
In connection with the exchange offer, neither the General Corporation Law
of the State of Delaware nor the indenture governing the notes gives you any
appraisal or dissenters' rights nor any other right to seek monetary damages in
court. We intend to conduct the exchange offer in accordance with the
provisions of the registration rights agreement and the applicable requirements
of the Securities Exchange Act and the related SEC rules and regulations.
For all relevant purposes, we will be regarded as having accepted properly
surrendered old notes if and when we give oral or written notice of our
acceptance to the exchange agent. The exchange agent will act as agent for the
surrendering holders of old notes for the purposes of receiving the new notes
from us.
If you surrender old notes in the exchange offer, you will not be required
to pay brokerage commissions or fees. In addition, subject to the instructions
in the letter of transmittal, you will not have to pay transfer taxes for the
exchange of old notes. We will pay all charges and expenses, other than certain
applicable taxes described under "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The "expiration date" is 5:00 p.m., New York City time on , 2002
unless we extend the exchange offer, in which case the expiration date is the
latest date and time to which we extend the exchange offer.
In order to extend the exchange offer, we will:
. notify the exchange agent of any extension by oral or written notice;
and
. issue a press release or other public announcement which would include
disclosure of the approximate number of old notes deposited and which
would be issued prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date.
We reserve the right:
. to delay accepting any old notes;
. to extend the exchange offer;
. to terminate or amend the exchange offer, and not accept for exchange
any old notes not previously accepted for exchange, upon the occurrence
of any of the events set forth in "--Conditions of the Exchange Offer"
by giving oral or written notice to the exchange agent; or
. to waive any conditions or otherwise amend the exchange offer in any
respect, by giving oral or written notice to the exchange agent.
Any delay in acceptance, extension, termination or amendment will be
followed as soon as practicable by a press release or other public announcement
or post-effective amendment to the registration statement.
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If the exchange offer is amended in a manner determined by us to constitute
a material change, we will promptly disclose that amendment by means of a
prospectus supplement or post-effective amendment that will be distributed to
the holders. We will also extend the exchange offer for a period of five to ten
business days, depending upon the significance of the amendment and the manner
of disclosure to the holders, if the exchange offer would otherwise expire
during the five to ten business day period.
We will have no obligation to publish, advertise or otherwise communicate
any public announcement of any delay, extension, amendment (other than
amendments constituting a material change to the exchange offer) or termination
that we may choose to make, other than by making a timely release to an
appropriate news agency.
Interest on the New Notes
The new notes will accrue cash interest on the same terms as the old notes,
payable semi-annually in arrears on June 15 and December 15 of each year,
commencing June 15, 2002. Old notes accepted for exchange will not receive
accrued interest thereon at the time of exchange. However, each new note will
bear interest from the most recent date to which interest has been paid on the
old notes, or if no interest has been paid on the old notes or the new notes
from November 21, 2001.
Resale of the New Notes
We believe that you will be allowed to resell the new notes to the public
without registration under the Securities Act, and without delivering a
prospectus that satisfies the requirements of Section 10 of the Securities Act,
if you can make the representations set forth above under "Summary--Summary of
the Terms of the Exchange Offer--Procedures for participating in the exchange
offer." However, if you intend to participate in a distribution of the new
notes, you must comply with the registration requirements of the Securities Act
and deliver a prospectus in connection with resales, unless an exemption from
registration is otherwise available. In addition, you will be subject to
additional restrictions if you are an "affiliate" of Gap as defined under Rule
405 of the Securities Act. You will be required to represent to us in the
letter of transmittal accompanying this prospectus that you meet these
conditions exempting you from the registration requirements.
Our belief that you will be allowed to resell the new notes without
registration is based on interpretations of the SEC expressed in some of the
SEC's no-action letters to other issuers in exchange offers like ours. However,
we have not asked the SEC to consider this particular exchange offer in the
context of a no-action letter. Therefore, you cannot be certain that the SEC
will treat it in the same way it has treated other exchange offers in the past.
A broker-dealer that has bought old notes for market-making or other
trading activities has to deliver a prospectus to resell any new notes it
receives for its own account in the exchange offer. This prospectus may be used
by a broker-dealer to resell any of its new notes. We have agreed in the
registration rights agreement to send this prospectus to any broker-dealer that
requests copies in the letter of transmittal for a period of up to 180 days
after expiration date of the exchange offer. See "Plan of Distribution" for
more information regarding broker-dealers.
Procedures for Tendering
General Procedures
If you wish to surrender old notes you must:
. complete, sign and date the letter of transmittal, or a facsimile
thereof, or send a timely confirmation of a book-entry transfer of your
old notes to the exchange agent;
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. have the signatures guaranteed if required by the letter of
transmittal; and
. mail or deliver the required documents to the exchange agent at the
address appearing below under "--Exchange Agent" for receipt prior to
the expiration date.
In addition, either:
. certificates for your old notes must be received by the exchange agent
along with the letter of transmittal;
. a timely confirmation of a book-entry transfer of the old notes into
the exchange agent's account at DTC, pursuant to the procedure for
book-entry transfer described below, must be received by the exchange
agent prior to the expiration date; or
. you must comply with the procedures described below under "--Guaranteed
Delivery Procedures."
THE METHOD OF DELIVERY TO THE EXCHANGE AGENT OF OLD NOTES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR ELECTION AND RISK.
INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT YOU USE AN OVERNIGHT OR
HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. DO NOT SEND THE LETTER OF TRANSMITTAL OR ANY OLD NOTES TO US. YOU MAY
REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR NOMINEE
PERFORM THESE TRANSACTIONS FOR YOU.
If you do not withdraw your surrender of old notes prior to the expiration
date, you will be regarded as agreeing to surrender the old notes in accordance
with the terms and conditions in this offer.
If you are a beneficial owner of the old notes and your old notes are held
through a broker, dealer, commercial bank, trust company or other nominee and
you want to surrender your old notes, you should contact your intermediary
promptly and instruct it to surrender the old notes on your behalf.
Signatures and Guarantee of Signatures
Signatures on a letter of transmittal or a notice of withdrawal described
below under "--Withdrawal of Tenders," as the case may be, must generally be
guaranteed by an eligible institution. You can submit a letter of transmittal
without guarantee if you surrender your old notes (a) as a registered holder
and you have not completed the box titled "Special Delivery Instruction" on the
letter of transmittal or (b) for the account of an eligible institution. In the
event that signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantee must be made by:
. a member firm of a registered national securities exchange or of the
National Association of Securities Dealers;
. a commercial bank or trust company having an office or correspondent in
the United States; or
. an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act which is a member of one of the recognized
signature guarantee programs identified in the letter of transmittal.
If you sign the letter of transmittal even though you are not the
registered holder of any old notes listed in the letter of transmittal, your
notes must be endorsed or accompanied by a properly completed bond power,
signed by the registered holder exactly as the registered holder's name appears
on the old notes.
14
In connection with any surrender of old notes in definitive certificated
form, if you sign the letter of transmittal or any old notes or bond powers in
your capacity as trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or if you are otherwise acting in a fiduciary or
representative capacity, you should indicate this when signing. Unless waived
by us, you must submit with the letter of transmittal evidence satisfactory to
us of your authority to act in the particular capacity.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's automated tender offer
program to surrender old notes.
Acceptance of Tenders
Your tender of old notes will constitute an agreement between you and us
governed by the terms and conditions provided in this prospectus and in the
letter of transmittal.
We will be deemed to have received your tender as of the date when your
duly signed letter of transmittal accompanied by your old notes tendered, or a
timely confirmation of a book-entry transfer of these notes into the exchange
agent's account at DTC with an agent's message, or a notice of guaranteed
delivery from an eligible institution is received by the exchange agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of surrendered old notes will be determined
by us in our sole discretion, which will be final and binding.
We reserve the absolute right to reject any and all old notes not properly
surrendered. Nor will we accept any old notes if our acceptance of them would,
in the opinion of our counsel, be unlawful. We also reserve the right to waive
any defects, irregularities or conditions of surrender as to particular old
notes.
Unless waived, you must cure any defects or irregularities in connection
with surrenders of old notes within the time period we will determine. Although
we intend to notify holders of defects or irregularities in connection with
surrenders of old notes, neither we, the exchange agent nor anyone else will be
liable for failure to give this notice. Surrenders of old notes will not be
deemed to have been made until any defects or irregularities have been cured or
waived.
We do not currently intend to acquire any old notes that are not
surrendered in the exchange offer or to file a registration statement to permit
resales of any old notes that are not surrendered pursuant to the exchange
offer. We reserve the right in our sole discretion to purchase or make offers
for any old notes that remain outstanding after the expiration date. To the
extent permitted by law, we also reserve the right to purchase old notes in the
open market, in privately negotiated transactions or otherwise. The terms of
any future purchases or offers could differ from the terms of the exchange
offer.
Effect of Surrendering Old Notes
By surrendering old notes pursuant to the exchange offer, you will be
telling us that, among other things:
. you have full power and authority to surrender, sell, assign and
transfer the old notes surrendered;
. we will acquire good title to the old notes being surrendered, free and
clear of all security interests, liens, restrictions, charges,
encumbrances, conditional sale agreements or other obligations relating
to their sale or transfer, and not subject to any adverse claim when
the old notes are accepted by us;
15
. you are acquiring the new notes in the ordinary course of your business;
. you are not engaged in, and do not intend to engage in, the
distribution of the new notes;
. you have no arrangement or understanding with any person to participate
in the distribution of the new notes;
. you acknowledge and agree that if you are a broker-dealer registered
under the Exchange Act or you are participating in the exchange offer
for the purpose of distributing the new notes, you must comply with the
registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale of the new notes, and you
understand that you cannot rely on the position of the SEC's staff in
their no-action letters;
. you understand that a secondary resale transaction described above and
any resales of new notes obtained by you in exchange for old notes
acquired by you directly from us should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or Item 508 of Regulation S-K of the
SEC; and
. you are not an "affiliate," as defined in Rule 405 under the Securities
Act, of Gap.
If you are a broker-dealer and you will receive new notes for your own
account in exchange for old notes that were acquired as a result of
market-making activities or other trading activities, you must acknowledge in
the letter of transmittal that you will deliver a prospectus in connection with
any resale of your new notes. See "Plan of Distribution."
Return of Old Notes
If any surrendered old notes are not accepted for any reason described in
this prospectus or if old notes are withdrawn or are submitted for a greater
principal amount than you desire to exchange, those old notes will be returned
without expense as promptly as practicable (a) to the person who surrendered
them or (b) in the case of old notes surrendered by book-entry transfer into
the exchange agent's account at DTC, the old notes will be credited to an
account maintained with DTC.
Book-Entry Delivery Procedure
Any financial institution that is a participant in DTC's system may make
book-entry deliveries of old notes by causing DTC to transfer these old notes
into the exchange agent's account at DTC according to DTC's procedures for
transfer. To effectively tender notes through DTC, the financial institution
that is a participant in DTC will electronically transmit its acceptance
through the Automatic Transfer Offer Program. DTC will then edit and verify the
acceptance and send an agent's message to the exchange agent for its
acceptance. An agent's message is a message transmitted by DTC to the exchange
agent stating that DTC has received an express acknowledgment from the
participant in DTC tendering the old notes that the participant has received
and agrees to be bound by the terms of the letter of transmittal, and that we
may enforce this agreement against the participant. The exchange agent will
make a request to establish an account for the old notes at DTC for purposes of
the exchange offer within two business days after the date of this prospectus.
A delivery of old notes through a book-entry transfer into the exchange
agent's account at DTC will only be effective if an agent's message or the
letter of transmittal or a facsimile of the letter of transmittal with any
required signature guarantees and any other required documents is transmitted
to and received by the exchange agent at the address indicated below under
"--Exchange Agent" for its receipt on or before the expiration date unless the
guaranteed delivery procedures described below are complied with. Delivery of
documents to DTC does not constitute delivery to the exchange agent.
16
Guaranteed Delivery Procedures
If you wish to surrender your old notes and (a) your old notes are not
readily available so you can meet the expiration date deadline or (b) you
cannot deliver your old notes, the letter of transmittal or any other required
documents to the exchange agent prior to the expiration date, you may still
participate in the exchange offer if:
. the surrender is made through an eligible institution;
. prior to the expiration date, the exchange agent receives from the
eligible institution a properly completed and duly executed notice of
guaranteed delivery substantially in the form provided by us, by
facsimile transmission, mail or hand delivery, containing the name and
address of the holder, the certificate number(s) of the old notes, if
applicable, and the principal amount of old notes surrendered. The
notice of guaranteed delivery must also state that the surrender is
being made thereby and guarantee that, within three New York Stock
Exchange trading days after the expiration date, the letter of
transmittal, together with the certificate(s) representing the old
notes in proper form for transfer or a book-entry confirmation with an
agent's message, as the case may be, and any other required documents,
will be deposited by the eligible institution with the exchange agent;
and
. the properly executed letter of transmittal, as well as the
certificate(s) representing all surrendered old notes in proper form
for transfer or a book-entry confirmation, as the case may be, and all
other documents required by the letter of transmittal are received by
the exchange agent within three New York Stock Exchange trading days
after the expiration date.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your
surrender of old notes at any time prior to the expiration date.
To withdraw a surrender of old notes in the exchange offer, the exchange
agent must receive a written or facsimile transmission notice of withdrawal at
its address set forth herein prior to the expiration date. Any notice of
withdrawal must:
. specify the name of the person having deposited the old notes to be
withdrawn;
. identify the old notes to be withdrawn, including the certificate
number or numbers, if applicable, and principal amount of the old
notes; and
. be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered or be
accompanied by documents of transfer sufficient to permit the trustee
for the initial notes to register the transfer of these notes into the
name of the person having made the original tender and withdrawing the
tender.
All questions as to the validity, form, eligibility and time of receipt of
notices will be determined by us, in our sole discretion, and our determination
shall be final and binding on all parties. Any old notes so withdrawn will be
deemed not to have been validly surrendered for purposes of the exchange offer,
and no new notes will be issued unless the old notes so withdrawn are validly
retendered. Properly withdrawn old notes may be resurrendered by following one
of the procedures described above under "--Procedures for Tendering" at any
time prior to the expiration date.
17
Conditions of the Exchange Offer
Notwithstanding any other term of the exchange offer, or any extension of
the exchange offer, we do not have to accept for exchange, or exchange new
notes for, any old notes, and we may terminate the exchange offer before
acceptance of the old notes, if:
. any statute, rule or regulation has been enacted, or any action has
been taken by any court or governmental authority that, in our
reasonable judgment, seeks to or would prohibit, restrict or otherwise
render consummation of the exchange offer illegal; or
. any change, or any development that would cause a change, in our
business or financial affairs has occurred that, in our sole judgment,
might materially impair our ability to proceed with the exchange offer
or that would materially impair the contemplated benefits to us of the
exchange offer; or
. a change occurs in the current interpretations by the staff of the SEC
that, in our reasonable judgment, might materially impair our ability
to proceed with the exchange offer.
If we, in our sole discretion, determine that any of the above conditions
is not satisfied, we may:
. refuse to accept any old notes and return all surrendered old notes to
the surrendering holders;
. extend the exchange offer and retain all old notes surrendered prior to
the expiration date, subject to the holders' right to withdraw the
surrender of the old notes; or
. waive any unsatisfied conditions regarding the exchange offer and
accept all properly surrendered old notes that have not been withdrawn.
If this waiver constitutes a material change to the exchange offer, we
will promptly disclose the waiver by means of a prospectus supplement
or post-effective amendment to the registration statement that includes
this prospectus that will be distributed to the holders. We will also
extend the exchange offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of
disclosure to the holders, if the exchange offer would otherwise expire
during the five to ten business day period.
Exchange Agent
The Bank of New York is the exchange agent for the exchange offer. You
should direct any questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notice of guaranteed delivery to the exchange agent, addressed as
follows:
By Registered or Certified Mail, Hand or The Bank of New York 15 Broad
Overnight Delivery: Street, 16th Floor New York, New
York 10007 Attention: Ms. Diane
Amoroso Reorganization Unit
To Confirm by Telephone: (212) 235-2353
Facsimile Transmissions (eligible
institutions only): (212) 235-2261
The Bank of New York also serves as trustee under the indenture.
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Fees and Expenses
We will pay for the expenses of the exchange offer. The principal
solicitation is being made by mail. However, additional solicitation may be
made by facsimile transmission, e-mail, telephone or in person by our officers
and regular employees.
We have not retained a dealer-manager for the exchange offer and will not
make any payments to brokers, dealers or others soliciting acceptances of the
exchange offer. We will, however, pay the exchange agent reasonable and
customary fees and out-of-pocket expenses.
We will pay any transfer taxes applicable to the exchange of old notes. If,
however, a transfer tax is imposed for any reason other than the exchange, then
the amount of any transfer taxes will be payable by the person surrendering the
notes. If you do not submit satisfactory evidence of payment of taxes or of an
exemption with the letter of transmittal, the amount of those transfer taxes
will be billed directly to you.
Consequences of Failing to Exchange Old Notes
Participation in the exchange offer is voluntary. You are urged to consult
your financial and tax advisors in making your decisions on what action to take.
Old notes that are not exchanged will remain "restricted securities" within
the meaning of Rule 144(a)(3)(iv) of the Securities Act. Accordingly, they may
not be offered, sold, pledged or otherwise transferred except:
. to a person who the seller reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act purchasing for its own account or for the account of a
qualified institutional buyer in a transaction meeting the requirements
of Rule 144A;
. in an offshore transaction complying with Rule 904 of Regulation S
under the Securities Act;
. pursuant to an exemption from registration under the Securities Act
provided by Rule 144, if available; or
. pursuant to an effective registration statement under the Securities
Act.
Accounting Treatment
For accounting purposes, we will recognize no gain or loss as a result of
the exchange offer. The expenses of the exchange offer will be amortized over
the remaining term of the notes.
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DESCRIPTION OF THE NEW NOTES
The form and terms of the new notes of each series and the old notes of
each series are identical in all material respects, except that transfer
restrictions and registration rights and related penalty provisions for failure
to register the notes applicable to the old notes do not apply to the new notes.
The old notes were, and the new notes will be, issued under an indenture
dated as of November 21, 2001 between us and The Bank of New York, as trustee.
The following discussion includes a summary description of the material terms
of the indenture and the registration rights agreement dated as of November 21,
2001 between Gap and the initial purchasers. Because this is a summary, it does
not include all of the information that is included in the indenture or the
registration rights agreement, including the definitions of some of the terms
used below. For example, in this section we use capitalized words to signify
defined terms that have been given special meaning in the indenture. We
describe the meaning for only the more important terms. Wherever we refer to
particular sections or defined terms, those sections or defined terms are
incorporated by reference therein. In this section, references to "we,'' "us"
or "our" refer solely to The Gap, Inc. and not its subsidiaries. You should
read the indenture and the registration rights agreement carefully and in their
entirety. You may request copies of these documents from Gap, as described
under "Where You Can Find More Information."
General
The new notes will be issued only in fully registered form without coupons
and in denominations of $1,000 or integral multiples of $1,000. The new notes
will be our general unsecured and unsubordinated obligations and will rank
equally and ratably with our other unsecured and unsubordinated obligations. No
sinking fund is provided for the notes. The 2005 notes are limited to an
aggregate principal amount of $200,000,000. The 2008 notes are limited to an
aggregate principal amount of $500,000,000. Payment of the full principal
amount of the 2005 notes will be due on December 15, 2005, except to the extent
the 2005 notes have been redeemed prior to maturity. Payment of the full
principal amount of the 2008 notes will be due on December 15, 2008, except to
the extent the 2008 notes have been redeemed prior to maturity. We may redeem
the notes of either series at our option at any time, in whole or in part, at
the redemption prices calculated as described under "--Optional Redemption."
The 2005 notes will bear interest initially at the annual rate of 8.15%,
and the 2008 notes will bear interest initially at the annual rate of 8.80%, in
each case payable semiannually in arrears on June 15 and December 15 of each
year, beginning June 15, 2002. The interest rate on each series of the new
notes will be subject to adjustment in certain circumstances as described under
"--Interest Rate Adjustment." On January 14, 2002, Moody's Investors Service
reduced our long-term senior unsecured corporate credit ratings from Baa2 to
Baa3. On February 14, 2002, Moody's reduced our long and short-term senior
unsecured corporate credit ratings from Baa3 to Ba2 and from Prime-3 to Not
Prime, respectively, with a negative outlook on our long-term ratings, and
Standard & Poor's Rating Service reduced our long and short-term corporate
credit ratings from BBB+ to BB+ and from A-2 to B, respectively, with a stable
outlook on our long-term ratings. On February 27, 2002, Moody's reduced our
long-term senior unsecured corporate credit ratings from Ba2 to Ba3 and stated
that its outlook on our long-term ratings was stable. As a result of these
recent downgrades, effective June 15, 2002, the interest rate payable by us on
the 2005 notes is subject to increase to 9.90% per annum and the interest rate
payable by us on the 2008 notes is subject to increase to 10.55% per annum.
Interest will be paid to the persons in whose names the notes are registered at
the close of business on the preceding June 1 or December 1. Interest on the
notes will be computed on the basis of a 360-day year of twelve 30-day months.
The principal of, premium, if any, and interest on the notes will be
payable, the transfer of notes will be registrable and the notes may be
presented for exchange, at the corporate trust office of the trustee, The Bank
of New York, located at 20 Broad Street, Lower Level, Attn: Corporate Trust
Reorg.
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Department, New York, New York 10005. So long as the notes are represented by
global notes, the interest payable on the notes will be paid to Cede & Co., the
nominee of the Depository Trust Company, or DTC, or its registered assigns as
the registered owner of the global notes, by wire transfer of immediately
available funds on each of the applicable interest payment dates, not later
than 2:30 p.m. Eastern Time. If the notes are no longer represented by global
notes, payment of interest may, at our option, be made by check mailed to the
address of the person entitled thereto. No service charge will be due for any
transfer or exchange of notes, but we may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Book-Entry, Delivery and Form
Except as set forth below, each of the new notes will initially be issued
in the form of one or more global notes (each, a "new global note"). Each new
global note will be deposited on the date of the closing of the exchange of the
old notes for the new notes with, or on behalf of, DTC and will be registered
in the name of DTC or its nominee. Investors may hold their beneficial
interests in a new global note directly through DTC or indirectly through
organizations which are participants in the DTC system.
Unless and until they are exchanged in whole or in part for certificated
notes, the new global notes may not be transferred except as a whole by DTC or
its nominee.
DTC has advised us as follows:
. DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
. DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions
between participants through electronic book-entry changes in accounts
of its participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations and other
organizations. Indirect access to the DTC system is available to
others, including banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
Upon the issuance of the new global notes, DTC or its custodian will
credit, on its internal system, the respective principal amounts of the
exchange notes represented by the new global notes to the accounts of persons
who have accounts with DTC. Ownership of beneficial interests in the new global
notes will be limited to persons who have accounts with DTC or persons who hold
interests through the persons who have accounts with DTC. Persons who have
accounts with DTC are referred to as "participants." Ownership of beneficial
interests in the new global notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its
nominee, with respect to interests of participants, and the records of
participants, with respect to interests of persons other than participants.
As long as DTC or its nominee is the registered owner or holder of the new
global notes, DTC or the nominee, as the case may be, will be considered the
sole record owner or holder of the exchange notes represented by the new global
notes for all purposes under the indenture and the exchange notes. No
beneficial owners of an interest in the new global notes will be able to
transfer that interest except according to DTC's applicable procedures, in
addition to those provided for under the indenture. Owners of beneficial
interests in the new global notes will not:
. be entitled to have the new notes represented by the new global notes
registered in their names,
21
. receive or be entitled to receive physical delivery of certificated
notes in definitive form, and
. be considered to be the owners or holders of any new notes under the
new global notes.
Accordingly, each person owning a beneficial interest in new global notes
must rely on the procedures of DTC and, if a person is not a participant, on
the procedures of the participant through which that person owns its interests,
to exercise any right of a holder of new notes under the new global notes. We
understand that under existing industry practice, if an owner of a beneficial
interest in the new global notes desires to take any action that DTC, as the
holder of the new global notes, is entitled to take, DTC would authorize the
participants to take that action, and that the participants would authorize
beneficial owners owning through the participants to take that action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payments of the principal of, premium, if any, and interest on the exchange
notes represented by the new global notes will be made by us to the trustee and
from the trustee to DTC or its nominee, as the case may be, as the registered
owner of the new global notes. Neither we, the trustee, nor any paying agent
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the new global notes or for maintaining, supervising or reviewing any records
relating to the beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
of, premium, if any, or interest on the new global notes will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial ownership interests in the principal amount of the new
global notes, as shown on the records of DTC or its nominee. We also expect
that payments by participants to owners of beneficial interests in the new
global notes held through these participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for these
customers. These payments will be the responsibility of these participants.
Transfer between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. If a holder requires physical delivery of notes
in certificated form for any reason, including to sell notes to persons in
states which require the delivery of the notes or to pledge the notes, a holder
must transfer its interest in the new global notes in accordance with the
normal procedures of DTC and the procedures set forth in the indenture.
Unless and until they are exchanged in whole or in part for certificated
exchange notes in definitive form, the new global notes may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC.
DTC has advised us that DTC will take any action permitted to be taken by a
holder of notes, including the presentation of notes for exchange as described
below, only at the direction of one or more participants to whose account the
DTC interests in the new global notes are credited. Further, DTC will take any
action permitted to be taken by a holder of notes only in respect of that
portion of the aggregate principal amount of notes as to which the participant
or participants has or have given that direction.
Although DTC has agreed to these procedures in order to facilitate
transfers of interests in the new global notes among participants of DTC, it is
under no obligation to perform these procedures, and may discontinue them at
any time. Neither we nor the trustee will have any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
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Subject to specified conditions, any person having a beneficial interest in
the new global notes may, upon request to the trustee, exchange the beneficial
interest for exchange notes in the form of certificated notes. Upon any
issuance of certificated notes, the trustee is required to register the
certificated notes in the name of, and cause the same to be delivered to, the
person or persons, or the nominee of these persons. In addition, if DTC is at
any time unwilling or unable to continue as a depositary for the new global
notes, and a successor depositary is not appointed by us within 120 days, we
will issue certificated notes in exchange for the new global notes.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof.
Links have been established among DTC, Clearstream Banking and Euroclear,
which are two European book-entry depositaries similar to DTC, to facilitate
the initial issuance of the notes sold outside of the United States and
cross-market transfers of the notes associated with secondary market trading.
Although DTC, Clearstream Banking and Euroclear have agreed to the
procedures provided below in order to facilitate transfers, they are under no
obligation to perform these procedures, and these procedures may be modified or
discontinued at any time.
Clearstream Banking and Euroclear will record the ownership interests of
their participants in much the same way as DTC, and DTC will record the total
ownership of each of the U.S. agents of Clearstream Banking and Euroclear, as
participants in DTC.
When new global notes are to be transferred from the account of a DTC
participant to the account of a Clearstream Banking participant or a Euroclear
participant, the purchaser must send instructions to Clearstream Banking or
Euroclear through a participant at least one day prior to settlement.
Clearstream Banking or Euroclear, as the case may be, will instruct its U.S.
agent to receive new global notes against payment. After settlement,
Clearstream Banking or Euroclear will credit its participant's account. Credit
for the new global notes will appear on the next day (European time).
Because settlement is taking place during New York business hours, DTC
participants will be able to employ their usual procedures for sending new
global notes to the relevant U.S. agent acting for the benefit of Clearstream
Banking or Euroclear participants. The sale proceeds will be available to the
DTC seller on the settlement date. As a result, to the DTC participant, a
cross-market transaction will settle no differently than a trade between two
DTC participants.
When a Clearstream Banking or Euroclear participant wishes to transfer new
global notes to a DTC participant, the seller will be required to send
instructions to Clearstream Banking or Euroclear through a participant at least
one business day prior to settlement. In these cases, Clearstream Banking or
Euroclear will instruct its U.S. agent to transfer these new global notes
against payment for them.
The payment will then be reflected in the account of the Clearstream
Banking or Euroclear participant the following day, with the proceeds
back-valued to the value date, which would be the preceding day, when
settlement occurs in New York. If settlement is not completed on the intended
value date, that is, the trade fails, proceeds credited to the Clearstream
Banking or Euroclear participant's account will instead be valued as of the
actual settlement date.
Optional Redemption
We may redeem the new notes of either series, in whole or in part, at our
option at any time at a redemption price equal to the greater of:
. 100% of the principal amount of such notes; or
23
. the sum of the present values of the remaining scheduled payments of
principal and interest thereon, not including the portion of any such
payments of interest accrued as of the redemption date, discounted to
the redemption date on a semiannual basis at the "adjusted treasury
rate" (as defined below). In each case, we must also pay accrued and
unpaid interest, including the additional interest referred to under
"--Interest Rate Adjustment," if any, to the redemption date. The
redemption price is calculated assuming a 360-day year consisting of
twelve 30-day months.
For purposes of this calculation, the "adjusted treasury rate" is to be
determined on the third business day preceding the redemption date, and is (1)
the arithmetic mean of the yields under the heading "Week Ending" published in
the "statistical release" referred to below most recently published prior to
the date of determination under the caption "Treasury Constant Maturities" for
the maturity (rounded to the nearest month) corresponding to the remaining life
to maturity, as of the redemption date, of the principal being redeemed plus
(2) 0.45%. If no maturity set forth under this heading exactly corresponds to
the maturity of such principal, yields for the two published maturities most
closely corresponding to the maturity of such principal will be calculated
pursuant to the immediately preceding sentence, and the adjusted treasury rate
will be interpolated or extrapolated from these yields on a straight-line
basis, rounding in each of the relevant periods to the nearest month.
When we refer to "statistical release," we mean the statistical release
designated "H.15(519)" or any successor publication which is published weekly
by the Federal Reserve System and which establishes yields on actively-traded
United States government securities adjusted to constant maturities, or, if
this statistical release is not published at the time of any determination
under the terms of the notes, then such other reasonably comparable index which
will be designated by us.
We will mail notice of any optional redemption at least 30 days but not
more than 60 days before the redemption date to each holder of the notes to be
redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions thereof
called for optional redemption.
Interest Rate Adjustment
The interest rate payable on the notes of each series will be subject to
adjustment from time to time if either Moody's or Standard & Poor's reduces the
rating ascribed to such notes below Baa2, in the case of Moody's, or below
BBB+, in the case of Standard & Poor's. In this event, the interest rate
payable on such notes will be increased by 0.25% for each rating category
downgrade by either rating agency. In addition, if Moody's or Standard & Poor's
subsequently increases the rating ascribed to such notes, then the interest
rate then payable on such notes will be decreased by 0.25% for each rating
category upgrade by either rating agency up to Baa2, in the case of Moody's,
and BBB+, in the case of Standard & Poor's, but in no event will the interest
rate be reduced below the initial interest rate payable on such notes. Each
adjustment required by any change in rating, whether occasioned by the action
of Moody's or Standard & Poor's, will be independent of, and in addition to,
any and all other adjustments. Any such interest rate increase or decrease will
take effect from the interest payment period beginning immediately after the
first interest payment date following the related rating downgrade or upgrade,
as the case may be. For this purpose, a ratings category is the difference
between a particular rating assigned by either Moody's or Standard & Poor's and
the next higher or next lower rating. For example, in the case of Moody's the
difference between Baa2 and Baa3 shall constitute one rating category and in
the case of Standard & Poor's the difference between BBB+ and BBB shall
constitute one rating category. There is no limit to the number of times the
interest rate payable on the notes can be adjusted. On January 14, 2002,
Moody's Investors Service reduced our long-term senior unsecured corporate
credit ratings from Baa2 to Baa3. On February 14, 2002,
24
Moody's reduced our long and short-term senior unsecured corporate credit
ratings from Baa3 to Ba2 and from Prime-3 to Not Prime, respectively, with a
negative outlook on our long-term ratings, and Standard & Poor's Rating Service
reduced our long and short-term corporate credit ratings from BBB+ to BB+ and
from A-2 to B, respectively, with a stable outlook on our long-term ratings. On
February 27, 2002, Moody's reduced our long-term senior unsecured corporate
credit ratings from Ba2 to Ba3 and stated that its outlook on our long-term
ratings was stable. As a result of these recent downgrades, effective June 15,
2002, the interest rate payable by us on the 2005 notes is subject to increase
to 9.90% per annum and the interest rate payable by us on the 2008 notes is
subject to increase to 10.55% per annum.
Covenants
Except as set forth below under "Consolidation, Merger and Sale of Assets,"
the notes will not contain any restrictive covenants, including covenants
restricting us or any of our subsidiaries from incurring, issuing, assuming or
guaranteeing any indebtedness or encumbering any of our property or any of our
subsidiaries, or restricting us or any of our subsidiaries from transferring
assets or entering into any sale and leaseback transaction.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into any other entity or
transfer or lease our assets substantially as an entirety to any entity, unless
(1) either we are the continuing corporation, or any successor or purchaser
is a corporation, partnership or trust organized under the laws of the
United States, any state thereof or the District of Columbia, and the
successor or purchaser expressly assumes our obligations on the notes
under a supplemental indenture;
(2) immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time or both,
would become an event of default, shall have occurred and be
continuing; and
(3) if a supplemental indenture is to be executed in connection with such
consolidation, merger, transfer or lease, we have delivered to the
trustee an officers' certificate and an opinion of counsel stating
compliance with these provisions.
No Protection in the Event of a Change of Control
The notes will not contain any provisions that afford holders of the notes
protection in the event of a change in control of us or in the event of a
highly leveraged transaction (whether or not the transaction results in a
change in control of us).
Events of Default
Any one of the following events will constitute an event of default under
the indenture with respect to the notes of either series:
(1) we fail to pay any interest, including additional interest, when due,
on any note of that series, which failure continues for 30 days;
(2) we fail to pay principal of or any premium on the notes of that series
when due;
25
(3) we fail to perform, or breach, any covenant or warranty in the
indenture or in the notes of that series, which failure continues for
60 days after written notice as provided in the indenture;
(4) a default under any indebtedness for money borrowed by us or any of our
subsidiaries if (A) the default either (1) results from the failure to
pay the principal of any such indebtedness at its stated maturity or
(2) relates to an obligation other than the obligation to pay the
principal of such indebtedness at its stated maturity and results in
such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, (B) the
principal amount of such indebtedness, together with the principal
amount of any other such indebtedness in default for failure to pay
principal at stated maturity or the maturity of which has been so
accelerated, aggregates $25 million or more at any one time outstanding
and (C) such indebtedness is not discharged, or such acceleration is
not rescinded or annulled, within 10 business days after written notice
as provided in the indenture; or
(5) certain events of bankruptcy, insolvency or reorganization involving us.
If an event of default (other than an event of default described in clause
(5) of the preceding paragraph) with respect to the notes outstanding of either
series shall occur and be continuing, either the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding notes of that series
may accelerate the maturity of all the notes of that series; provided, however,
that after such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of the
outstanding notes of that series may, under certain circumstances, rescind and
annul such acceleration if all events of default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the indenture.
If an event of default described in clause (5) of the immediately preceding
paragraph occurs, the outstanding notes will automatically become due and
payable immediately without any declaration or other act on the part of the
trustee or any holder.
The indenture provides that, subject to the duty of the trustee during
default to act with the required standard of care, the trustee will be under no
obligation to exercise any of its rights or powers under the indenture at the
request or direction of any of the holders of notes, unless such holders shall
have offered to the trustee reasonable indemnity. Subject to such provisions
for the indemnification of the trustee and to certain other conditions, the
holders of a majority in aggregate principal amount of the outstanding notes of
either series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or
exercising any trust or power conferred on the trustee, with respect to the
notes of that series.
No holder of notes of either series will have any right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
(1) that holder has given the trustee written notice of a continuing event
of default;
(2) the holders of at least 25% in principal amount of the outstanding
notes of that series have made written request, and offered reasonable
indemnity, to the trustee to institute proceedings;
(3) the trustee shall have failed to institute such proceeding within 60
days of the receipt of such request; and
(4) the trustee has not received during the 60-day period from the holders
of a majority in principal amount of the outstanding notes of that
series a direction inconsistent with such request.
26
However, these limitations do not apply to a suit instituted by a holder of
notes for enforcement of payment of the principal of, or premium, if any, or
interest, including additional interest, on such notes on or after the due date
expressed in such notes.
We will be required to furnish to the trustee annually a statement as to
our performance of certain of our obligations under the indenture and as to any
default in such performance.
Modification and Waiver
Certain limited modifications of the indenture may be made by us and the
trustee without the consent of the holders of any of the notes.
Other modifications of the indenture also may be made by us and the trustee
with the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding notes of either series; however, no
modification or amendment may, without the consent of the holders of all notes
of that series affected thereby:
(1) change the stated maturity of the principal or interest, including any
additional interest, on any note of that series;
(2) reduce the principal amount of or premium, if any, or interest,
including any additional interest, on any note of that series or modify
the provisions with respect to the adjustment of the interest rate
payable on the notes of that series in a manner adverse to the holders;
(3) change the place or currency of payment of principal of or premium, if
any, or interest, including any additional interest, on any note of
that series;
(4) impair the right to institute suit for the enforcement of any payment
on any note of that series;
(5) modify our obligation to deliver information required under Rule 144A
to permit resales of the old notes of that series if we cease to be
subject to the reporting requirements of the Exchange Act;
(6) reduce the amount payable upon a redemption or modify our right to
redeem the notes of that series in a manner adverse to the holders; or
(7) reduce the percentage in principal amount of outstanding notes of that
series, the consent of whose holders is required for modification or
amendment of the indenture or for waiver of compliance with certain
provisions of the indenture or for waiver of certain defaults.
The holders of at least a majority in aggregate principal amount of the
outstanding notes of either series may, on behalf of all holders of notes of
that series, waive compliance by us with certain restrictive provisions of the
indenture. The holders of not less than a majority in aggregate principal
amount of the outstanding notes of either series may, on behalf of all holders
of notes of that series, waive any past default with respect to that series of
notes under the indenture, except a default in the payment of principal or
interest, including any additional interest, or in respect of a covenant or
provision of the indenture that cannot be modified or amended without the
consent of the holder of each note of that series.
Defeasance of Notes or Certain Covenants
Defeasance and Discharge
We have the option to be discharged from any and all obligations in respect
of the notes of either series (except for certain transfer and administrative
duties) upon the deposit with the trustee, in trust, of money and/or U.S.
government obligations which, through the payment of interest and principal in
27
accordance with their terms, will provide money in an amount sufficient to pay
principal of and premium, if any, and interest on the notes of that series on
the stated maturity of such payments in accordance with the terms of the
indenture and such notes. Discharge may only occur if, among other things, we
have delivered to the trustee an opinion of counsel to the effect that we have
received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in either case
to the effect that the deposit and related defeasance will not cause the
holders of such notes to recognize income, gain or loss for U.S. federal income
tax purposes.
Defeasance of Certain Covenants
We have the option to not comply with the restrictive covenant described
above under "Consolidation, Merger and Sale of Assets." We are required, in
order to exercise this option, to deposit with the trustee money and/or U.S.
government obligations which, through the payment of interest and principal in
accordance with their terms, will provide money in an amount sufficient to pay
principal of and premium, if any, and interest on the notes on the stated
maturity of such payments in accordance with the terms of the indenture and the
notes. We are also required to deliver to the trustee an opinion of counsel to
the effect that the deposit and related covenant defeasance will not cause the
holders of such notes to recognize income, gain or loss for U.S. federal income
tax purposes.
In the event that we exercise this option and the notes are declared due
and payable because of the occurrence of any event of default, the amount of
money and U.S. government obligations on deposit with the trustee will be
sufficient to pay amounts due on the notes at the time of their stated maturity
but may not be sufficient to pay amounts due on the notes at the time of the
acceleration resulting from such event of default. However, we will remain
liable for such payments.
Registration Covenant; Exchange Offer
In connection with the issuance of the old notes, we entered into an
exchange and registration rights agreement (the "registration rights
agreement") pursuant to which we agreed with the initial purchasers, for the
benefit of the holders of the notes, that we will use our best efforts, at our
cost, to file and cause to become effective an exchange offer registration
statement or, if applicable, we will use our reasonable best efforts, at our
cost, to file and cause to become effective a shelf registration. The following
summary of selected provisions of the registration rights agreement is not
complete and is subject to, and qualified in its entirety by reference to, the
provisions of the registration rights agreement, including the definitions. A
copy of the registration rights agreement is attached hereto as Exhibit 4.2.
You should read the registration rights agreement in its entirety.
In the event that applicable interpretations of the staff of the SEC do not
permit us to effect the exchange offer, or under certain other circumstances,
we will, at our cost, use our reasonable best efforts to cause to become
effective a shelf registration statement with respect to resales of the old
notes and to keep such shelf registration statement effective until such time
as the notes are eligible for resale pursuant to Rule 144(k) under the
Securities Act or such shorter period that will terminate when all notes
covered by the shelf registration statement have been sold pursuant to the
shelf registration statement. We will, in the event of such a shelf
registration, provide to each holder copies of the prospectus, notify each
holder when the shelf registration statement for the old notes has become
effective and take certain other actions as are required to permit resales of
the old notes. A holder that sells its old notes pursuant to the shelf
registration statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
holder (including certain indemnification obligations).
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We will be permitted to suspend the use of the prospectus that is part of
the shelf registration statement in connection with the resale of the notes for
valid business reasons, including the acquisition or divestitures of assets,
pending corporate developments and similar events. The periods during which we
can suspend the use of the prospectus may not, however, exceed a total of 30
days in any 90-day period or a total of 90 days in any 12-month period.
In the event that:
(1) the exchange offer has not been consummated within 45 days after the
effective date of the exchange offer registration statement;
(2) any registration statement required by the registration rights
agreement is filed and declared effective but shall thereafter be
withdrawn or shall become subject to a stop order suspending its
effectiveness (except as specifically permitted in the registration
rights agreement) without being succeeded immediately by an additional
registration statement filed and declared effective; or
(3) the holders of notes are prevented or restricted by us from effecting
sales pursuant to the shelf registration statement except as expressly
permitted as described above (any such event referred to in clauses (1)
through (3), a "registration default"),
in that case additional interest will accrue (in addition to the stated
interest on the notes, as it may be adjusted as described under "--Interest
Rate Adjustment") on the principal amount of the series of notes as to which
the registration default exists at a per annum rate of:
(i) 0.25% for the portion of the first 90-day period that the
registration default continues;
(ii) 0.50% for the portion of the second 90-day period that the
registration default continues;
(iii) 0.75% for the portion of the third 90-day period that the
registration default continues; and
(iv) 1.00% thereafter for the remaining period that the registration
default continues.
At no time will the additional interest resulting from a registration
default exceed in the aggregate 1.00% per annum.
This additional interest will be payable semiannually in arrears on each
June 15 and December 15. The additional interest, if any, will be computed on
the basis of a 365 or 366 day year, as the case may be, and the number of days
actually elapsed.
Concerning the Trustee
The Bank of New York is the trustee under the indenture. The trustee may
resign at any time or may be removed by the holders of at least a majority in
aggregate principal amount of the outstanding notes. If the trustee resigns, is
removed or becomes incapable of acting as trustee or if a vacancy occurs in the
office of the trustee for any cause, a successor trustee shall be appointed in
accordance with the provisions of the indenture.
The Bank of New York is a lender on two of our revolving credit agreements
and has in the past engaged, and may in the future engage, in other commercial
banking transactions with us. Pursuant to the Trust Indenture Act, upon the
occurrence of a default with respect to the notes, The Bank of New York may be
deemed to have a conflicting interest by virtue of its lending and other
business relationships with us. In that event, The Bank of New York would be
required to resign as trustee or eliminate the conflicting interest.
29
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences associated with the exchange of the old notes for the new notes
and the purchase, ownership and disposition of the exchange notes as of the
date hereof. Except where noted, it deals only with purchasers that acquired
the old notes pursuant to the offering at the initial offering price and who
will hold the new notes as capital assets within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"), and does not apply
to certain types of holders subject to special rules, such as dealers in
securities or currencies, financial institutions, life insurance companies,
persons holding notes as part of a hedging or conversion transaction or a
straddle, or persons whose functional currency is not the United States dollar.
Furthermore, the discussion below is based upon the provisions of the Code,
existing and proposed United States Treasury regulations promulgated
thereunder, and current administrative rulings and judicial decisions thereon,
all of which are subject to change, possibly on a retroactive basis, which
could result in United States federal income tax consequences different from
those discussed below.
Prospective holders of notes are advised to consult with their tax advisors
as to the United States federal income tax consequences of the purchase,
ownership and disposition of notes in light of their particular circumstances,
as well as the effect of any state, local or other tax laws.
As used in this prospectus, the term "United States holder" means a
beneficial owner of a note that is (i) a citizen or resident of the United
States for United States federal income tax purposes, (ii) a corporation or
partnership (or any entity treated as a corporation or partnership for United
States federal income tax purposes) created or organized under the laws of the
United States, any state thereof or the District of Columbia, (iii) an estate
the income of which is subject to United States federal income tax without
regard to its source or (iv) a trust if (x) a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have the authority to control all substantial
decisions of the trust or (y) the trust has a valid election in effect under
applicable United States Treasury regulations to be treated as a United States
holder. If a partnership (including any entity treated as a partnership for
United States federal income tax purposes) is a holder of the notes, the United
States federal income tax treatment of a partner in such a partnership will
generally depend on the status of the partner and the activities of the
partnership. Partners in such a partnership should consult their own tax
advisors as to the particular federal income tax consequences applicable to
them.
A "non-United States holder" is any beneficial owner of a note that is not
a United States holder.
Exchange Offer
The exchange of an old note for a new note pursuant to the exchange offer
should be without United States federal income tax consequences. The new note
received for an old note should be treated for United States federal income tax
purposes as a continuation of the old note.
Tax Consequences to United States Holders
Stated interest on a new note generally will be taxable to a United States
holder as ordinary income as it accrues or is received in accordance with the
United States holder's method of accounting for United States federal income
tax purposes.
We will be obligated to pay additional interest on the new notes under
certain circumstances described under "Description of Notes--Interest Rate
Adjustment" above. Based on the facts and
30
circumstances in existence on the date of issuance of the notes, under current
Treasury Regulations, such additional interest should not be taxable to a
United States holder until it is paid or becomes payable, depending upon the
United States holder's method of accounting for tax purposes. However, there
can be no assurance that the Internal Revenue Service will not propose a
different method of taxing such additional interest.
Upon the sale, exchange, retirement or other disposition of a new note, a
United States holder generally will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange, retirement or
other disposition (not including amounts attributable to accrued but unpaid
interest, which will be taxable as ordinary income) and such United States
holder's adjusted tax basis in the new note. A United States holder's adjusted
tax basis in a new note will, in general, be the United States holder's cost
therefor, less any principal payments received by such holder. Such gain or
loss will generally be capital gain or loss and will be long-term capital gain
or loss if the new note (including the holding period of the old note) has been
held for more than one year.
Tax Consequences to Non-United States Holders
Under present United States federal income tax law, subject to the
discussion of backup withholding and information reporting below:
(a) payments of interest on the new notes to any non-United States
holder will not be subject to United States federal income, branch profits
or withholding tax provided that:
. the non-United States holder does not actually or constructively
own 10% or more of the total combined voting power of all classes
of our stock entitled to vote;
. the non-United States holder is not a bank receiving interest on an
extension of credit pursuant to a loan agreement entered into in
the ordinary course of its trade or business;
. the non-United States holder is not a controlled foreign
corporation that is related to us (directly or indirectly) through
stock ownership;
. such interest payments are not effectively connected with a United
States trade or business; and
. certain certification requirements are met. Such certification will
be satisfied if the beneficial owner of the exchange note certifies
on IRS Form W-8 BEN or a substantially similar substitute form,
under penalties of perjury, that it is not a United States person
and provides its name and address, and (x) such beneficial owner
files such form with the withholding agent or (y) in the case of an
exchange note held through a foreign partnership or intermediary,
the beneficial owner and the foreign partnership or intermediary
satisfy certification requirements of applicable United States
Treasury regulations; and
(b) a non-United States holder will not be subject to United States
federal income or branch profits tax on gain realized on the sale,
exchange, or retirement or other disposition of a new note, unless (i) the
gain is effectively connected with a trade or business carried on by such
holder within the United States or, if a treaty applies (and the holder
complies with applicable certification and other requirements to claim
treaty benefits), is generally attributable to a United States permanent
establishment maintained by the holder, or (ii) the holder is an individual
who is present in the United States for 183 days or more in the taxable
year of disposition and certain other requirements are met.
A new note held by an individual who at the time of death is not a citizen
or resident of the United States will not be subject to United States federal
estate tax with respect to a new note as a result of
31
such individual's death, provided that (i) the individual does not actually or
constructively own 10% or more of the total combined voting power of all
classes of our stock entitled to vote and (ii) payments with respect to the
exchange note would not have been effectively connected with the conduct of a
United States trade or business.
Backup Withholding and Information Reporting
In general, payments of interest and the proceeds of the sale, exchange,
retirement or other disposition of the new notes payable by a United States
paying agent or other United States intermediary will be subject to information
reporting. In addition, backup withholding will generally apply to these
payments if (i) in the case of a United States holder, the holder fails to
provide its correct taxpayer identification number, or fails to certify that it
is not subject to backup withholding or fails to report all interest and
dividends required to be shown on its United States federal income tax returns,
or (ii) in the case of a non-United States holder, the holder fails to provide
the certification on IRS Form W-8 BEN described above or otherwise does not
provide evidence of its exempt status. Certain United States holders
(including, among others, corporations) and non-United States holders that
comply with certain certification requirements may not be subject to backup
withholding. Any amount paid as backup withholding will be creditable against
the holder's United States federal income tax liability provided that the
required information is timely furnished to the Internal Revenue Service.
Holders of new notes should consult their tax advisors as to their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption.
32
PLAN OF DISTRIBUTION
We are not using any underwriters for this exchange offer. We are bearing
the expenses of the exchange.
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of these new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
the old notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 180 days after the
expiration date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any resale of these
new notes.
We will not receive any proceeds from any sale of new notes by
broker-dealers or any other persons. New notes received by broker-dealers for
their own account pursuant to the exchange offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the new notes, or a combination
of these methods of resale, at market prices prevailing at the time of resale,
at prices related to the prevailing market prices, or negotiated prices. Any
resale of new notes may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any broker-dealer and/or the purchasers of any new notes. Any
broker-dealer that resells new notes that were received by it for its own
account pursuant to the exchange offer and any broker-dealer that participates
in a distribution of the new notes may be deemed to be an "underwriter" within
the meaning of the Securities Act, and any profit on any these resales of new
notes and any commissions or concessions received by any of these persons may
be deemed to be underwriting compensation under the Securities Act. The letter
of transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests these documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer,
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the old notes, including any broker-dealer, against
certain liabilities, including liabilities under the Securities Act.
33
LEGAL MATTERS
The validity of the new notes was passed upon for us by Orrick, Herrington
& Sutcliffe LLP. A copy of the legal opinion rendered by Orrick, Herrington &
Sutcliffe LLP was filed as an exhibit to the registration statement containing
this prospectus.
EXPERTS
The consolidated financial statements of the Company as of February 2, 2002
and February 3, 2001 and for each of the three fiscal years in the period ended
February 2, 2002, incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2002
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
34
[LOGO] Gap Inc.
THE GAP, INC.
Offer to Exchange
8.15% Notes Due December 15, 2005
Which Have Been Registered Under
The Securities Act of 1933
for
$200,000,000 Outstanding Unregistered
8.15% Notes Due December 15, 2005
and
8.80% Notes Due December 15, 2008
Which Have Been Registered Under
The Securities Act Of 1933
for
$500,000,000 Outstanding Unregistered
8.80% Notes Due December 15, 2008
-----------------
PROSPECTUS
-----------------
, 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Officers and Directors
The Certificate of Incorporation of the Company, as permitted in Section
102 of the General Corporation Law of the State of Delaware (the "GCL"),
eliminates the personal liability of a director to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
paying a dividend or approving a stock repurchase in violation of Delaware law,
or (iv) any transactions from which the director derived any improper personal
benefit.
Under the Bylaws of the Company, each director and officer of the Company
is entitled to indemnification, as a matter of contractual right, to the
fullest extent permitted by the GCL as the same exists or may hereafter be
amended, against all expenses, liability and loss incurred in connection with
any action, suit or proceeding in which he or she may be involved by reason of
the fact that he or she is or was a director or officer of the Company. Section
145 of the GCL empowers a corporation to indemnify any director or officer, or
former director or officer against expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any action,
suit or proceeding (other than a derivative action) by reason of the fact that
he or she is or was a director or officer or is or was serving at the request
of the corporation as an agent of another entity, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action,
had no reasonable cause to believe his or her conduct was unlawful. In regard
to a derivative action, indemnification may not be made in respect of any
matter as to which an officer or director is adjudged to be liable unless the
Delaware Court of Chancery, or the court in which such action was brought,
shall determine such person is fairly and reasonably entitled to indemnity.
The Company carries insurance policies in standard form indemnifying its
directors and officers against liabilities arising from certain acts performed
by them in their respective capacities as such. The policies also provide for
reimbursement of the Company for any sums it may be required or permitted to
pay pursuant to applicable law to its directors and officers by way of
indemnification against liabilities incurred by them in their capacities as
such.
Item 21. Exhibit And Financial Statement Schedules
(a) Exhibits
Exhibit
No. Description
------- -----------
4.1 Indenture, dated as of November 21, 2001, between The Gap, Inc. and The Bank of New
York, as Trustee*
4.2 Exchange and Registration Rights Agreement, dated as of November 21, 2001, between
The Gap, Inc. and Goldman, Sachs & Co., et al.*
4.3 Form of Notes (included in Exhibit 4.1)*
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP*
12.1 Computation of Ratio of Earnings to Fixed Charges
II-1
Exhibit
No. Description
------- -----------
23.1 Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 5.1)*
23.2 Consent of Deloitte & Touche LLP, Independent Certified Public Accountants
24.1 Power of Attorney*
25.1 Statement of Eligibility of Trustee on Form T-1*
99.1 Form of Letter of Transmittal*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9*
99.4 Form of Letter to Clients*
99.5 Form of Letter to Nominees*
--------
* Previously filed
(b) Financial Statement Schedules
None.
Item 22. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange
II-2
Act of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) To respond to requests for information that is incorporated by
reference into this prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
became effective.
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 3 to Form S-4 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Francisco, State of California, on April 2, 2002.
THE GAP, INC.
By: /s/ MILLARD S. DREXLER
----------------------------------
Name: Millard S. Drexler
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 3 to Form S-4 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated below.
Signature Title Date
--------- ----- ----
/s/ MILLARD S. DREXLER Chief Executive Officer and April 2, 2002
----------------------- Director (Principal Executive
Millard S. Drexler Officer)
/s/ HEIDI KUNZ Executive Vice President and April 2, 2002
----------------------- Chief Financial Officer
Heidi Kunz (Principal Financial and
Accounting Officer)
* Chairman and Director April 2, 2002
-----------------------
Donald G. Fisher
* Director Apri1 2, 2002
-----------------------
Adrian D. P. Bellamy
* Director April 2, 2002
-----------------------
Doris F. Fisher
* Director April 2, 2002
-----------------------
Robert J. Fisher
* Director April 2, 2002
-----------------------
Glenda A. Hatchett
* Director April 2, 2002
-----------------------
Steven P. Jobs
II-4
Signature Title Date
--------- ----- ----
/s/ JOHN M. LILLIE Director April 2, 2002
-----------------------------
John M. Lillie
* Director April 2, 2002
-----------------------------
Arun Sarin
* Director April 2, 2002
-----------------------------
Charles R. Schwab
The undersigned, by signing his name hereto, does hereby sign this report
on behalf of each of the above-indicated directors of the registrant pursuant
to powers of attorney executed by such directors.
*By: /s/ JOHN M. LILLIE
-------------------------
John M. Lillie
Attorney-in-fact
II-5
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
4.1 Indenture, dated as of November 21, 2001, between The Gap, Inc. and The Bank of New
York, as Trustee*
4.2 Exchange and Registration Rights Agreement, dated as of November 21, 2001, between
The Gap, Inc. and Goldman, Sachs & Co., et al.*
4.3 Form of Notes (included in Exhibit 4.1)*
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP*
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 5.1)*
23.2 Consent of Deloitte & Touche LLP, Independent Certified Public Accountants
24.1 Power of Attorney*
25.1 Statement of Eligibility of Trustee on Form T-1*
99.1 Form of Letter of Transmittal*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9*
99.4 Form of Letter to Clients*
99.5 Form of Letter to Nominees*
--------
* Previously filed