EXHIBIT 10.1
COVENANT NOT TO COMPETE
AND NON-DISCLOSURE AGREEMENT
PARTIES:
Xxxx X. Xxxxxx (Employee)
NIKE, Inc., and its parent, divisions, subsidiaries and affiliates (NIKE)
DATE: February 28, 2006
RECITALS:
A. This Covenant Not to Compete and Non-Disclosure Agreement is
executed upon the Employee's advancement to the position of President
and Chief Executive Officer of NIKE, is a condition of such advancement,
and is intended to supersede his prior Covenant Not To Compete and Non-
Disclosure Agreement, amended as of December 28, 2004.
B. Over the course of Employee's employment with NIKE, Employee will
be or has been exposed to and is in a position to develop confidential
information peculiar to NIKE's business and not generally known to the
public as defined below ("Protected Information"). It is anticipated
that Employee will continue to be exposed to Protected Information of
greater sensitivity as Employee advances in the company.
C. The nature of NIKE's business is highly competitive and
disclosure of any Protected Information would result in severe damage to
NIKE and be difficult to measure.
D. NIKE makes use of its Protected Information throughout the world.
Protected Information of NIKE can be used to NIKE's detriment anywhere
in the world.
AGREEMENT:
In consideration of the foregoing, and the terms and conditions
set forth below, the parties agree as follows:
1. Covenant Not to Compete.
_______________________
1.1 Competition Restriction. During Employee's employment by
_______________________
NIKE, under the terms of any employment contract or otherwise, and for
twenty-four (24) months thereafter, (the "Restriction Period"), Employee
will not directly or indirectly, own, manage, control, or participate in
the ownership, management or control of, or be employed by, consult for,
or be connected in any manner with, any business engaged anywhere in the
world in the athletic footwear, athletic apparel or sports equipment and
accessories business, or any other business which directly competes with
NIKE or any of its parent, subsidiaries or affiliated corporations
("Competitor"). By way of illustration only, examples of NIKE
competitors include but are not limited to: Adidas, FILA, Reebok, Puma,
Asics, Saucony, New Balance, Skechers, KSwiss, Merrell, Timberland,
Champion, Russell, Oakley, DKNY, Xxxxx Xxxxxx/Polo Sport, B.U.M., FUBU,
The Gap, Xxxxx Xxxxxxxx, Umbro, The North Face, Foot Locker, The Sports
Authority, Finish Line, Columbia Sportswear, Xxxxxx, Mizuno, Callaway
Golf, Acushnet, and Xxxxxx Made. This provision is subject to NIKE's
option to waive all or any portion of the Restriction Period as more
specifically provided below.
1.2 Extension of Time. In the event that Employee breaches
_________________
this covenant not to compete, the Restriction Period shall automatically
toll from the date of the first breach, and all subsequent breaches,
until the resolution of the breach through private settlement, judicial
or other action, including all appeals. The Restriction Period shall
continue upon the effective date of any such settlement judicial or
other resolution. NIKE shall not be obligated to pay Employee the
additional compensation described in paragraph 1.4 below during any
period of time in which this Agreement is tolled due to Employee's
breach. In the event Employee receives such additional compensation for
any such breach, Employee must immediately reimburse NIKE in the amount
of all such compensation upon the receipt of a written request by NIKE.
1.3 Waiver of Non-Compete. NIKE has the option to elect to
_____________________
waive all or a portion of the Restriction Period or to limit the
definition of Competitor, by giving Employee seven (7) days prior notice
of such election; provided, however, unless Employee is terminated "for
cause" (which shall only include continual and repeated neglect of
duties or acts of dishonesty), any waiver of the Restriction Period must
be with the consent of Employee. In the event all or a portion of the
Restriction Period is waived, NIKE shall not be obligated to pay
Employee for any period of time as to which the Covenant Not to Compete
has been waived.
1.4 Additional Consideration. As additional consideration for
________________________
the Covenant Not To Compete described above, should NIKE terminate
Employee's employment and the Covenant Not To Compete is enforced, NIKE
shall pay Employee a monthly payment equal to one-twelfth (1/12) of
Employee's then current Annual NIKE Income (defined herein to mean base
salary and annual Performance Sharing Plan bonus calculated at 100% of
Employee's last targeted rate) while the Restriction Period is in effect.
If Employee voluntarily terminates employment and the Covenant Not To
Compete is enforced, NIKE shall pay Employee a monthly payment equal to
one-twenty-fourth (1/24) of Employee's then current Annual NIKE Income
while the Restriction Period is in effect.
2. Subsequent Employer. Employee agrees to notify NIKE at the time
___________________
of separation of employment of the name of Employee's new employer, if
known. Employee further agrees to disclose to NIKE the name of any
subsequent employer during the Restriction Period, wherever located and
regardless of whether such employer is a competitor of NIKE.
3. Non-Disclosure Agreement.
________________________
3.1 Protectable Information Defined. "Protected Information"
_______________________________
shall mean all proprietary information, in whatever form and format, of
NIKE and all information provided to NIKE by third parties which NIKE is
obligated to keep confidential. Employee agrees that any and all
information to which Employee has access concerning NIKE projects and
internal NIKE information is Protected Information, whether in verbal
form, machine-readable form, written or other tangible form, and whether
designated as confidential or unmarked. Without limiting the foregoing,
Protected Information includes information relating to NIKE's research
and development activities, its intellectual property and the filing or
pendency of patent applications, trade secrets, confidential techniques,
methods, styles, designs, design concepts and ideas, customer and vendor
lists, contract factory lists, pricing information, manufacturing plans,
business and marketing plans, sales and futures information, non-public
financial information, methods of operation, manufacturing processes and
methods, products, and personnel information.
3.2 Excluded Information. Notwithstanding paragraph 3.1,
____________________
Protected Information excludes any information that is or becomes part
of the public domain through no act or failure to act on the part of the
Employee. Specifically, employees shall be permitted to retain as part
of their personal portfolio copies of the employees' original artwork
and designs, provided the artwork or designs have become part of the
public domain. In any dispute between the parties with respect to this
exclusion, the burden of proof will be on Employee and such proof will
be by clear and convincing evidence.
3.3 Employee's Obligations. During the period of employment by
______________________
NIKE and for a period of two (2) years thereafter, Employee will hold in
confidence and protect all Protected Information and will not, at any
time, directly or indirectly, use and Protected Information for any
purpose outside the scope of Employee's employment with NIKE or disclose
any Protected Information to any third person or organization without
the prior written consent of NIKE. Specifically, but not by way of
limitation, Employee will not ever copy, transmit, reproduce, summarize,
quote, publish or make any commercial or other use whatsoever of any
Protected Information without the prior written consent of NIKE.
Employee will also take reasonable security precautions and such other
actions as may be necessary to insure that there is no use or disclosure,
intentional or inadvertent, of Protected Information in violation of
this Agreement.
4. Return of Protected Information. At the request of NIKE at
_______________________________
anytime, and in any event, upon termination of employment, Employee
shall immediately return to NIKE all confidential documents, including
tapes, notebooks, drawings, computer disks and other similar
repositories of or containing Protected Information, and all copies
thereof, then in Employee's possession or under Employee's control.
5. Unauthorized Use. During the period of employment with NIKE and
________________
thereafter, Employee will notify NIKE immediately if Employee becomes
aware of the unauthorized possession, use or knowledge of any Protected
Information by any person employed or not employed by NIKE at the time
of such possession, use or knowledge. Employee will cooperate with NIKE
in the investigation of any such incident and will cooperate with NIKE
in any litigation with third parties deemed necessary by NIKE to protect
the Protected Information. NIKE shall provide reasonable reimbursement
to Employee for each hour so engaged and that amount shall not be
diminished by operation of any payment under Paragraph 1.4 of this
Agreement.
6. Non-Recruitment. During the term of this Agreement and for a
_______________
period of one (1) year thereafter, Employee will not directly or
indirectly, solicit, divert or hire away (or attempt to solicit, divert
or hire away) to or for himself or any other company or business
organization, any NIKE employee, whether or not such employee is a full-
time employee or temporary employee and whether or not such employment
is pursuant to a written agreement or is at will.
7. Accounting of Profits. Employee agrees that, if Employee should
_____________________
violate any term of this Agreement, NIKE shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remuneration or benefits which Employee directly or indirectly has
realized and/or may realize as a result of or in connection with any
such violation (including return of any additional consideration paid by
NIKE pursuant to Paragraph 1.4 above). Such remedy shall be in addition
to and not in limitation of any injunctive relief or other rights or
remedies to which NIKE may be entitled at law or in equity.
8. General Provisions.
__________________
8.1 Survival. This Agreement shall continue in effect after
________
the termination of Employee's employment, regardless of the reason for
termination.
8.2 Waiver. No waiver, amendment, modification or cancellation
______
of any term or condition of this Agreement will be effective unless
executed in writing by both parties. No written waiver will excuse the
performance of any act other than the act or acts specifically referred
to therein.
8.3 Severability. Each provision herein will be treated as a
____________
separate and independent clause and unenforceability of any one clause
will in no way impact the enforceability of any other clause. Should
any of the provisions in this Agreement be found to be unreasonable or
invalid by a court of competent jurisdiction, such provision will be
enforceable to the maximum extent enforceable by the law of that
jurisdiction.
8.4 Applicable Law and Jurisdiction. This Agreement, and
_______________________________
Employee's employment hereunder, shall be construed according to the
laws of the State of Oregon. Employee further hereby submits to the
jurisdiction of, and agrees that exclusive jurisdiction over and venue
for any action or proceeding arising out of or relating to this
Agreement shall lie in the state and federal courts located in Oregon.
Employee
By: _______________________________
Name: Xxxx X. Xxxxxx
NIKE, Inc.
By: _______________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board of Directors
