GYMBOREE CORP
EXHIBIT 10.54
<DOCUMENT>
<TYPE>EX-10.54
<SEQUENCE>5
<FILENAME>f90870exv10w54.htm
<DESCRIPTION>EXHIBIT 10.54
<TEXT>
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<TITLE>Exhibit 10.54</TITLE>
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<P align="right"><FONT size="2"><B>Exhibit - 10.54</B>
</FONT>

<P align="center"><FONT size="2"><B>THE GYMBOREE CORPORATION</B>
</FONT>


<P align="center"><FONT size="2"><B>MANAGEMENT CHANGE OF CONTROL PLAN</B>
</FONT>


<P align="center"><FONT size="2"><B>Amended and Restated<BR>
Effective May&nbsp;1, 2003</B>
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE I</B>
</FONT>


<P align="center"><FONT size="2"><B>PURPOSE, ESTABLISHMENT AND APPLICABILITY OF PLAN</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purposes. It is expected that the Company from time to time will consider
the possibility of a Change of Control. The Board recognizes that such
consideration can be a distraction to key Employees and can cause such
Employees to consider alternative employment opportunities. The Board has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continuous dedication and objectivity
of these Employees, notwithstanding the possibility, threat or occurrence of a
Change of Control. The Board believes that it is in the best interests of the
Company and its stockholders to provide these Employees with certain severance
benefits upon termination of employment following a Change of Control. Such
benefits provide these Employees an incentive to remain with the Company,
notwithstanding the possibility or occurrence of a Change of Control, and to
maximize the value of the Company upon a Change of Control for the benefit of
its stockholders.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Establishment of Plan. As of the Effective Date, the Company hereby
establishes the Plan, as set forth in this document.
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applicability of Plan. Subject to the terms of this Plan, the benefits
provided by this Plan shall be available to those Employees who, on or after
the Effective Date, receive a Notice of Participation.
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual Right to Benefits. This Plan and the Notice of Participation
establish and vest in each Participant a contractual right to the benefits to
which he or she is entitled pursuant to the terms thereof, enforceable by the
Participant against the Company.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE II</B>
</FONT>


<P align="center"><FONT size="2"><B>DEFINITIONS AND CONSTRUCTION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever used in the Plan, the following terms shall have the meanings set
forth below.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual Compensation. &#147;Annual Compensation&#148; shall mean an amount equal to the
sum of (i)&nbsp;the Participant&#146;s gross annual base salary, exclusive of bonuses,
commissions and other incentive pay, as in effect immediately preceding the
Change of Control, and (ii)&nbsp;the Participant&#146;s Average Annual Bonus.
</FONT>

<P align="center"><FONT size="2">-1-</FONT>

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<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average Annual Bonus. &#147;Average Annual Bonus&#148; shall mean the average bonus
payments received by the Participant under the Company&#146;s incentive bonus and
variable compensation programs as in effect on the date of a Change of Control
(or any predecessor or successor programs) for the three most recent
consecutive and complete fiscal years of the Company prior to the fiscal year
in which the Change of Control occurs. For purposes of calculating a
Participant&#146;s Average Annual Bonus, the following rules shall apply:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp; In the event a Participant was not eligible to participate in such
bonus and variable compensation programs for the entire three year period, the
Average Annual Bonus shall be calculated based upon the Participant&#146;s actual
period of eligibility; and
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp; In the event a Participant first became eligible to participate in
such bonus and variable compensation programs in the fiscal year in which the
Change of Control occurs, the Participant&#146;s Average Annual Bonus shall be based
on his or her targeted bonus and variable compensation amounts as in effect
immediately prior to such Change of Control.
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits Continuation Period. &#147;Benefits Continuation Period&#148; shall mean the
period set forth in a Participant&#146;s Notice of Participation, which period
immediately follows the Participant&#146;s Involuntary Termination.
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board. &#147;Board&#148; shall mean the Board of Directors of the Company.
</FONT>

<P align="left"><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cause. &#147;Cause&#148; shall mean (i)&nbsp;any act of personal dishonesty taken by the
Participant in connection with his or her responsibilities as an Employee and
intended to result in substantial personal enrichment of the Participant, (ii)
the Participant&#146;s conviction of a felony that is injurious to the Company,
(iii)&nbsp;a willful act by the Participant which constitutes gross misconduct and
which is injurious to the Company, (iv)&nbsp;continued substantial violations by the
Participant of the Participant&#146;s employment duties which are demonstrably
willful and deliberate on the Participant&#146;s part after there has been delivered
to the Participant a written demand for performance from the Company which
specifically sets forth the factual basis for the Company&#146;s belief that the
Participant has not substantially performed his duties or (v)&nbsp;any act that
would constitute a material violation of the standards set forth in this Plan,
including, without limitation, the standards of Article&nbsp;VI.
</FONT>

<P align="left"><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change of Control. &#147;Change of Control&#148; shall mean the occurrence of any of
the following events.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp; Any &#147;person&#148; (as such term is used in Sections&nbsp;13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the &#147;beneficial owner&#148;
(as defined in Rule&nbsp;13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company&#146;s then outstanding voting securities;
or
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp; A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. &#147;Incumbent Directors&#148; shall mean directors who either (A)
are directors of the Company as of the date hereof,
</FONT>
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<P align="left"><FONT size="2"> or (B)&nbsp;are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp; The consummation of a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%)
of the total voting power represented by the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation; or
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp; the consummation of the sale or disposition by the Company of all or
substantially all of the Company&#146;s assets.
</FONT>

<P align="left"><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code. &#147;Code&#148; shall mean the Internal Revenue Code of 1986, as amended.
</FONT>

<P align="left"><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company. &#147;Company&#146; shall mean The Gymboree Corporation, any subsidiary
corporations, any successor entities as provided in Article&nbsp;VIII hereof, and
any parent or subsidiaries of such successor entities.
</FONT>

<P align="left"><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company-Paid Coverage. &#147;Company-Paid Coverage&#148; shall mean the benefits
coverage described in Article&nbsp;IV hereof.
</FONT>

<P align="left"><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disability. &#147;Disability&#148; shall mean that the Participant has been unable
to perform his or her duties as an Employee as the result of incapacity due to
physical or mental illness, and the Participant is found to be disabled within
the meaning of the Company&#146;s long-term disability plan.
</FONT>

<P align="left"><FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective Date. &#147;Effective Date&#148; shall mean May&nbsp;1, 2003.
</FONT>

<P align="left"><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee. &#147;Employee&#148; shall mean an employee of the Company.
</FONT>

<P align="left"><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ERISA. &#147;ERISA&#148; shall mean the Employee Retirement Income Security Act of
1974, as amended.
</FONT>

<P align="left"><FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Involuntary Termination. &#147;Involuntary Termination&#148; shall mean (i)&nbsp;an
involuntary termination of a Participant&#146;s employment other than for Cause,
(ii)&nbsp;without the Participant&#146;s express written consent, the significant
reduction of the Participant&#146;s title, duties or responsibilities relative to
the Participant&#146;s title, duties or responsibilities in effect immediately prior
to such reduction; provided, however, that a significant reduction in title,
duties or responsibilities solely by virtue of the Company being acquired and
made part of a larger entity (as example, when the Chief Financial Officer of
The Gymboree Corporation remains as such following a Change of Control and is
not made the Chief Financial Officer of the acquiring corporation) shall not
constitute an &#147;Involuntary Termination,&#148; (iii)&nbsp;without the Participant&#146;s
express written consent, a greater than 10% reduction by the Company in the
annual base salary or in the maximum dollar amount of potential annual cash
bonuses relative to the annual base
</FONT>
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<P align="left"><FONT size="2">salary and maximum dollar amount of potential annual cash bonuses as in effect
immediately prior to such reduction; (iv)&nbsp;without the Participant&#146;s express
written consent, a material reduction by the Company in the kind or level of
employee benefits to which the Participant is entitled immediately prior to
such reduction with the result that the Participant&#146;s overall benefits package
is significantly reduced; (v)&nbsp;without the Participant&#146;s express written
consent, the relocation of the Participant to a facility or a location more
than 50 miles from the Participant&#146;s then present work location and that adds
more than 100 miles to his or her daily round-trip commute; or (vi)&nbsp;the failure
of the Company to obtain the assumption of this Plan by any successors
contemplated in Article&nbsp;VIII below.
</FONT>

<P align="left"><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice of Participation. &#147;Notice of Participation&#148; shall mean an
individualized written notice of participation in the Plan from an authorized
officer of the Company.
</FONT>

<P align="left"><FONT size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participant. &#147;Participant&#148; shall mean an individual who meets the
eligibility requirements of Article&nbsp;III.
</FONT>

<P align="left"><FONT size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan. &#147;Plan&#148; shall mean this The Gymboree Corporation Management Change of
Control Plan.
</FONT>

<P align="left"><FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan Administrator. &#147;Plan Administrator&#148; shall mean the Board of Directors
of the Company, or its committee or designee, as shall be responsible for
administering the Plan.
</FONT>

<P align="left"><FONT size="2">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro-Rated Bonus Amount. &#147;Pro-Rated Bonus Amount&#148; shall mean a pro-rated
portion of the Participant&#146;s quarterly and annual bonus and variable
compensation calculated as of the Change of Control date, as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp; In the case of quarterly bonus or variable compensation paid or
payable to the Participant with respect to the fiscal quarter of the Company
completed immediately prior to the fiscal quarter in which the Change of
Control occurs, pro-rated by multiplying such amount by a fraction, the
numerator of which is the number of days during the fiscal quarter in which the
Change of Control occurs prior to the occurrence of the Change of Control, and
the denominator of which shall be ninety-one and one quarter; and
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp; In the case of annual bonus or variable compensation, the portion
shall be the amount of annual bonus or variable compensation payable to the
Participant under the Company&#146;s annual bonus or variable compensation program
in effect as of the Change of Control date, based on year-to-date financial
performance of the Company for the period ended immediately prior to the Change
of Control. For this purpose, the performance measures for such fiscal year
shall be adjusted, as appropriate, to take into account the shortened
performance period. The amount so determined shall be pro-rated by multiplying
such amount by a fraction, the numerator of which is the number of days during
such fiscal year prior to the occurrence of the Change of Control, and the
denominator of which shall be three hundred and sixty-five.
</FONT>

<P align="left"><FONT size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance Payment. &#147;Severance Payment&#148; shall mean the payment of severance
compensation as provided in Article&nbsp;IV hereof.
</FONT>

<P align="center"><FONT size="2">-4-</FONT>

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<P align="left"><FONT size="2">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severance Payment Percentage. &#147;Severance Payment Percentage&#146; shall mean
for each Participant, the Severance Payment Percentage set forth in such
Participant&#146;s Notice of Participation.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE III</B>
</FONT>


<P align="center"><FONT size="2"><B>ELIGIBILITY</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Waiver. As a condition of receiving benefits under the Plan, an Employee
must sign a
general waiver and release on a form provided by the Company.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participation in Plan. Each Employee who is designated by the Board and who
signs and returns to the Company a Notice of Participation within the time set
forth in such Notice shall be a Participant in the Plan. A Participant shall
cease to be a Participant in the Plan (i)&nbsp;upon ceasing to be an Employee, or
(ii)&nbsp;upon receiving written notice from the Plan Administrator prior to a
Change of Control that the Participant is no longer eligible to participate in
the Plan, unless in either case such Participant is then entitled to benefits
hereunder. A Participant entitled to benefits hereunder shall remain a
Participant in the Plan until the full amount of the benefits has been
delivered to the Participant.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE IV</B>
</FONT>


<P align="center"><FONT size="2"><B>SEVERANCE BENEFITS</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination Following A Change of Control. If a Participant&#146;s employment
terminated during the period following a Change of Control that is equal to the
same number of months as set forth in the Participant&#146;s Benefits Continuation
Period , then, subject to Articles V and VI hereof, the Participant shall be
entitled to receive severance benefits as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; Severance Pay Upon an Involuntary Termination. If the Participant&#146;s
employment with the Company terminates as a result of Involuntary Termination
other than for Cause, the Participant shall be entitled to receive a Severance
Payment equal to the sum of (i)&nbsp;the product obtained by multiplying the
Participant&#146;s Severance Payment Percentage times the Participant&#146;s Annual
Compensation, plus (ii)&nbsp;the Participant&#146;s Pro-Rated Bonus Amount. Any such
Severance Payment shall be paid in cash by the Company to the Participant in a
single lump sum payment, less applicable tax withholding, within ten (10)
business days of the Participant&#146;s termination date, and shall be in lieu of
any other severance or severance&#150;type benefits to which the Participant may be
entitled under any other Company-sponsored plan, practice or arrangement or
agreement between the Company and the Participant.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>EXAMPLE: </B>A Change of Control is consummated on June&nbsp;15, 2003.
Participant is Involuntarily Terminated other than for Cause as of July
1, 2003. Participant&#146;s Annual Compensation is $150,000. The Severance
Payment Percentage set forth in the Participant&#146;s Notice of Participation
is 100%. The Participant&#146;s Pro-Rated Bonus Amount for the 2003 fiscal
year is $10,000. The Participant is entitled to a Severance</FONT></TD>
</TR>
</TABLE>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Payment equal to (i)&nbsp;100% x $150,000, plus (ii)&nbsp;10,000, for a total
Severance Payment equal to $160,000.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; Employee Benefits Upon an Involuntary Termination. If the
Participant&#146;s employment with the Company is terminated as a result of
Involuntary Termination other than for Cause, then the Company shall continue
to provide the Participant with medical, dental, vision, disability and life
insurance coverage and employee assistance programs (or such comparable
alternative benefits as the Company may, in its discretion, determine to be
sufficient to satisfy its coverage as provided to the Participant immediately
prior to the Change of Control), with the same percentage of any premiums or
costs for such coverage paid for by the Company as is paid for by the Company
on behalf of active participants in the Company&#146;s comparable plans (the
&#147;Company-Paid Coverage&#148;). Company-Paid Coverage shall be provided to the
Participant for a period that ends on the earlier of (i)&nbsp;expiration of the
Participant&#146;s Benefits Continuation Period, or (ii)&nbsp;with respect to each
individual benefit within the Company-Paid Coverage, the date that Participant
and his or her covered dependents become covered under another employer&#146;s
employee benefit plan providing benefits and levels of coverage comparable to
the applicable Company-Paid Coverage benefit; provided, however, in no event
shall this obligation require the Company to provide coverage that is not
reasonably available under the Company&#146;s Plans or through the Company&#146;s
insurers. For purposes of Title X of the Consolidated Budget Reconciliation
Act of 1985 (&#147;COBRA&#148;), the date of the &#147;qualifying event&#148; for the Participant
and his or her covered dependents shall be the date upon which Company-Paid
Coverage terminates. Company-Paid Coverage shall be provided at the Company&#146;s
discretion.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Resignation: Termination For Cause. If the Participant&#146;s
employment terminates by reason of the Participant&#146;s voluntary resignation (and
is not an Involuntary Termination), or if the Company terminates the
Participant for Cause, then the Participant shall not be entitled to receive
severance or other benefits under this Plan and shall be entitled only to those
benefits (if any) as may be available under the Company&#146;s then existing
benefits plans and policies at the time of such termination.
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disability; Death. If the Participant&#146;s employment terminates by reason of
the Participant&#146;s death, or in the event the Company terminates the
Participant&#146;s employment following his or her Disability, the Participant shall
not be entitled to receive severance or other benefits under this Plan and
shall be entitled only to those benefits (if any) as may be available under the
Company&#146;s then existing benefits plans and policies at the time of such
termination.
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination Apart from Change of Control. In the event that a Participant&#146;s
employment terminates for any reason prior to the occurrence of a Change of
Control or after the period following a Change of Control that is equal to the
same number of months as set forth in the Participant&#146;s Benefits Continuation
Period, then the Participant shall not be entitled to receive severance or
other benefits under this Plan and shall be entitled only to those benefits (if
any) as may available under the Company&#146;s then existing benefits plans and
policies at the time of such termination.
</FONT>

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<P align="center"><FONT size="2"><B>ARTICLE V</B>
</FONT>


<P align="center"><FONT size="2"><B>GOLDEN PARACHUTE EXCISE TAX AND NON-DEDUCTIBILITY LIMITATIONS</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits Cap. Except if specifically otherwise set forth in a Participant&#146;s
Notice of Participation, in the event that the benefits under this Plan, when
aggregated with any other payments or benefits received by a Participant, or to
be received by a Participant, would (i)&nbsp;constitute &#147;parachute payments&#148; within
the meaning of Section&nbsp;280G of the Code, and (ii)&nbsp;but for this provision, would
be subject to the excise tax imposed by Section&nbsp;4999 of the Code or any similar
or successor provision, then the Participant&#146;s Plan benefits shall be reduced
to such lesser amount or degree as would result in no portion of such benefits
being subject to the excise tax under Section&nbsp;4999 of the Code.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Determination. Unless the Company and the Participant otherwise agree in
writing, any determination required under this Article or the Participant&#146;s
Notice of Participation shall be made in writing by the same firm of
independent public accountants who were employed by the Company immediately
prior to the Change of Control (the &#147;Accountants&#148;), whose determination shall
be conclusive and binding upon the Participant and the Company for all
purposes. For purposes of making the calculations required by this Article,
the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections&nbsp;280G and 4999 of the Code. The Company
and the Participant shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Article. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations pursuant
to this Article.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE VI</B>
</FONT>


<P align="center"><FONT size="2"><B>FORFEITURE OF SEVERANCE BENEFITS</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future Services with the Company. If a Participant provides services to the
Company (as an employee, independent contractor, consultant or otherwise)
during his or her Benefits Continuation Period and does so without the prior
written approval of the Company&#146;s General Counsel or his or her delegate, the
Participant shall repay (or, if the Severance Payment and/or Company-Paid
Coverage has not yet been paid or provided, forfeit) a pro rata amount of the
Severance Payment previously paid by the Company.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Violation of the Company&#146;s Code of Conduct, Code of Ethics or the
Participant&#146;s Restrictive Covenants. Notwithstanding any other provision of
this Plan to the contrary, if it is determined by the Company that a
Participant has violated the Company&#146;s code of conduct or code of ethics or
violated any restrictive covenants contained in the Participant&#146;s general
waiver and release or any other restrictive covenants contained in any other
Company plan or program or agreement between the Company and the Participant,
the Participant shall be required to repay to the Company an amount equal to
the economic value of all Severance Payments and Company-Paid Coverage already
paid or provided to the Participant under this Plan and the Participant shall
forfeit all other entitlements under this Plan. Additional forfeiture
provisions may apply
</FONT>
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<P align="left"><FONT size="2">under other agreements between the Participant and the Company, and any such
forfeiture provisions shall remain in full force and effect.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE VII</B>
</FONT>


<P align="center"><FONT size="2"><B>EMPLOYMENT STATUS: WITHHOLDING</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment Status. This Plan does not constitute a contract of employment
or impose on the Participant or the Company any obligations to retain the
Participant as an Employee, to change the status of the Participant&#146;s
employment, or to change the Company&#146;s policies regarding termination of
employment. The Participant&#146;s employment is and shall continue to be at will,
as defined under applicable law. If the Participant&#146;s employment with the
Company or a successor entity terminates for any reason, including (without
limitation) any termination prior to a Change of Control, the Participant shall
not be entitled to any payments, benefits, damages, awards or compensation
other than as provided by this Plan, or as may otherwise be available in
accordance with the Company&#146;s established employee plans and practices or other
agreements with the Company at the time of termination.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation of Plan Payments. All amounts paid pursuant to this Plan shall be
subject to regular payroll and withholding taxes.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE VIII</B>
</FONT>


<P align="center"><FONT size="2"><B>SUCCESSORS TO COMPANY AND PARTICIPANTS</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company&#146;s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company&#146;s business and/or assets
shall assume the obligations under this Plan and agree expressly to perform the
obligations under this Plan by executing a written agreement. For all purposes
under this Plan, the term &#147;Company&#148; shall include any successor to the
Company&#146;s business and/or assets which executes and delivers the assumption
agreement described in this subsection or which becomes bound by the terms of
this Plan by operations of law.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participant&#146;s Successors. All rights of the Participant hereunder shall
inure to the benefit of, and be enforceable by, the Participant&#146;s personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees, and legatees.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE IX</B>
</FONT>


<P align="center"><FONT size="2"><B>DURATION, AMENDMENT, AND TERMINATION</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Duration. This Plan shall terminate on May&nbsp;1, 2008, unless, (a)&nbsp;this Plan
is extended by the Board, (b)&nbsp;a Change of Control occurs prior to May&nbsp;1, 2008
or (c)&nbsp;the Board terminates the Plan in accordance with Article&nbsp;IX.2 below. If
a Change of Control occurs prior to termination of this Plan pursuant to the
preceding sentence, then this Plan shall terminate upon the date that all
obligations of the Company hereunder have been satisfied. A termination of
this Plan pursuant to the preceding sentences shall be effective for all
purposes, except that such
</FONT>
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<P align="left"><FONT size="2">termination shall not affect the payment or provision of compensation or
benefits earned by a Participant prior to the termination of this Plan.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment and Termination. The Board shall have the discretionary authority
to amend the Plan in any respect, including as to the removal or addition of
Participants, by resolution adopted by a majority of the Board, unless a Change
of Control has previously occurred. The Plan may be terminated by resolution
adopted by a majority of the Board, unless a Change of Control has previously
occurred. If a Change of Control occurs, the Plan and the designation of
Participants thereto shall no longer be subject to amendment, change,
substitution, deletion, revocation or termination in any respect whatsoever.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE X</B>
</FONT>


<P align="center"><FONT size="2"><B>ADMINISTRATION</B>
</FONT>

<P align="left"><FONT size="2">The Plan Administrator has all power and authority necessary or convenient to
administer this Plan, including, but not limited to, the exclusive authority
and discretion: (a)&nbsp;to construe and interpret this Plan; (b)&nbsp;to decide all
questions of eligibility for and the amount of benefits under this Plan; (c)&nbsp;to
prescribe procedures to be followed and the forms to be used by the
Participants pursuant to this Plan; and (d)&nbsp;to request and receive from all
Participants such information as the Plan Administrator determines is necessary
for the proper administration of this Plan.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE XI</B>
</FONT>


<P align="center"><FONT size="2"><B>CLAIMS PROCESS</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Claim for Benefits. A Participant (or any individual authorized by such
Participant) has the right under ERISA and this Plan to file a written claim
for benefits. To file a claim, the Participant must send the written claim to
the Company&#146;s Vice President, Human Resources . If such claim is denied in
whole or in part, the Participant shall receive written notice of the decision
of the Company&#146;s Vice President, Human Resources, within 90&nbsp;days after the
claim is received. Such written notice shall include the following
information: (i)&nbsp;specific reasons for the denial; (ii)&nbsp;specific reference to
pertinent Plan provisions on which the denial is based; (iii)&nbsp;a description of
any additional material or information necessary for the perfection of the
claim and an explanation of why it is needed; and (iv)&nbsp;steps to be taken if the
Participant wishes to appeal the denial of the claim, including a statement of
the Participant&#146;s right to bring a civil action under Section&nbsp;502(a) of ERISA
upon an adverse decision on appeal. If the Company&#146;s Vice President, Human
Resources, needs more than 90&nbsp;days to make a decision, he or she shall notify
the Participant in writing within the initial 90&nbsp;days and explain why more time
is required, and how long is needed. If a Participant (or any individual
authorized by such Participant) submits a claim according to the procedures
above and does not hear from the Company&#146;s Vice President, Human Resources,
within the appropriate time, the Participant may consider the claim denied.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appeals. The following appeal procedures give the rules for appealing a
denied claim. If a claim for benefits is denied, in whole or in part, or if
the Participant believes benefits under this Plan have not been properly
provided, the Participant (or any individual authorized by such Participant)
may appeal this denial in writing within 60&nbsp;days after the denial is received.
The
</FONT>
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<P align="left"><FONT size="2">Plan Administrator shall conduct a review and make a final decision within 60
days after receiving the Participant&#146;s written request for review. If the Plan
Administrator needs more than 60&nbsp;days to make a decision, it shall notify the
Participant in writing within the initial 60&nbsp;days and explain why more time is
required. The Plan Administrator may then take 60 more days to make a
decision. If such appeal is denied in whole or in part, the decision shall be
in writing and shall include the following information: (i)&nbsp;specific reasons
for the denial; (ii)&nbsp;specific reference to pertinent Plan provisions on which
the denial is based; (iii)&nbsp;a statement of the Participant&#146;s right to access and
receive copies, upon request and free of charge, of all documents and other
information relevant to such claim for benefits; and (iv)&nbsp;a statement of the
Participant&#146;s (or representative&#146;s) right to bring a civil action under Section
502(a) of ERISA. If the Plan Administrator does not respond within the
applicable time frame, the Participant may consider the appeal denied. If a
Participant (or any individual authorized by such Participant) submits a
written request to appeal a denied claim, the Participant has the right to
review pertinent Plan documents and to send a written statement of the issues
and any other documents to support the claim.
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limitations Period. A Participant must pursue the claim and appeal rights
described above before seeking any other legal recourse regarding a claim for
benefits. The Participant may thereafter file an action in a court of
competent jurisdiction, but he or she must do so within 180&nbsp;days after the date
of the notice of decision on appeal or such action will be forever barred.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE XII</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTICES AND ASSIGNMENT</B>
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General. Notices and all other communications contemplated by this Plan
shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid. In the case of the Participant, mailed notices
shall be addressed to him or her at the home address which he or she most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all
notices shall be directed to the attention of its Vice President, Human
Resources.
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice of Termination by the Company. Any termination by the Company of
the
Participant&#146;s employment at any time within the period following a Change of
Control that is equal to the same number of months as set forth in the
Participant&#146;s Benefits Continuation Period shall be communicated by a notice of
termination to the Participant at least five (5)&nbsp;days prior to the date of such
termination (or at least thirty (30)&nbsp;days prior to the date of a termination by
reason of the Participant&#146;s Disability). Such notice shall indicate the
specific termination provision or provisions in this Plan relied upon (if any),
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision or provisions so indicated,
and shall specify the termination date.
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice by the Participant of Involuntary Termination by the Company. In the
event that the Participant determines that an Involuntary Termination has
occurred at any time within the period following a Change of Control that is
equal to the same number of months as set forth in the Participant&#146;s Benefits
Continuation Period, the Participant shall give written notice to the
</FONT>
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<P align="left"><FONT size="2">Company that such Involuntary Termination has occurred. Such notice shall be
delivered by the Participant to the Company within ninety (90)&nbsp;days following
the date on which such Involuntary Termination occurred, shall indicate the
specific provisions or provisions in this Plan upon which the Participant
relied to make such determination and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for such determination. The
failure by the Participant to include in the notice any fact or circumstance
which contributes to a showing of Involuntary Termination shall not waive any
right of the Participant hereunder or preclude the Participant from asserting
such fact or circumstance in enforcing his or her rights hereunder.
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignment by Company. The Company may assign its rights under this Plan to
an affiliate, and an affiliate may assign its rights under this Plan to another
affiliate of the Company or to the Company; provided, however, that no
assignment shall be made if the net worth of the assignee is less than the net
worth of the Company at the time of assignment; provided, further, that the
Company shall guarantee all benefits payable hereunder. In the case of any
such assignment, the term &#147;Company&#148; when used in this Plan shall mean the
corporation that actually employs the Participant.
</FONT>


<P align="center"><FONT size="2"><B>ARTICLE XIII</B>
</FONT>


<P align="center"><FONT size="2"><B>GOVERNING LAW, JURISDICTION AND VENUE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Plan is intended to be, and shall be interpreted as, an unfunded employee
welfare benefit plan (within the meaning of Section&nbsp;3(1) of ERISA) for a select
group of management or highly compensated employees (within the meaning of
Section&nbsp;2520.104-24 of Department of Labor Regulations) and it shall be
enforced in accordance with ERISA. Any Participant or other person filing an
action related to this Plan shall be subject to the jurisdiction and venue of
the federal or state courts of the State of California.
</FONT>

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<P align="center"><FONT size="2"><B>THE GYMBOREE CORPORATION</B>
</FONT>


<P align="center"><FONT size="2"><B>MANAGEMENT CHANGE OF CONTROL PLAN<BR>
NOTICE OF PARTICIPATION</B>
</FONT>

<P align="left"><FONT size="2"><B>To:<BR>
Date: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 200_</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board has designated you as a Participant in the Plan, a copy of which
is attached hereto. The terms and conditions of your participation in the Plan
are as set forth in the Plan and herein. The terms defined in the Plan shall
have the same defined meanings in this Notice of Participation. As a condition
to receiving benefits under the Plan, you must sign a general waiver and
release in the form provided by the Company. The variables relating to your
Plan participation are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="68%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>Severance Payment Percentage:<BR>
Benefits Continuation Period:<BR>
Golden Parachute Excise Tax Treatment:</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<B>&#091;100%, 200%, 300%&#093;<br>
&#091;12, 18&nbsp;months&#093;</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;Instead of the limitation set forth in Article&nbsp;V.1 of the Plan, the
following provisions shall apply:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the benefits provided for in the Plan, when aggregated
with any other payments or benefits received by you, would (i)&nbsp;constitute
&#147;parachute payments&#148; within the meaning of Section&nbsp;280G of the Code, and (ii)
would be subject to the excise tax imposed by Section&nbsp;4999 of the Code (the
&#147;Excise Tax&#148;), then the Company shall pay you an additional amount, such that
the net amount retained by you shall be as if the Excise Tax did not apply to
you.&#093;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Severance Payment is subject to forfeiture or repayment in certain
cases if the Participant has violated the Company&#146;s code of ethics or code of
conduct or the Participant&#146;s restrictive covenants with the Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you agree to participate in the Plan on these terms and conditions,
please acknowledge your acceptance by signing below. Please return the signed
copy of this Notice of Participation within ten (10)&nbsp;days of the date set forth
above to:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">General Counsel<BR>
The Gymboree Corporation<BR>
700 Airport Boulevard<BR>
Suite&nbsp;200<BR>
Burlingame, California 94010</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">Your failure to timely remit this signed Notice of Participation will result in
your immediate removal from the Plan. Please retain a copy of this Notice of
Participation, along with the Plan, for your records.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" nowrap><FONT size="2">Date:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">Signature:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
</TABLE>
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