EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 17th day of September, 2006, between
NIKE, Inc. (hereinafter "Nike"), and Xxxx X. Xxxxxxx (hereinafter
"Executive").
In consideration of the mutual covenants and promises contained
herein, Nike and Executive agree as follows:
1. Employment.
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A. Executive is hereby employed by Nike in the position
of Vice President, Global Sports Marketing. For the term of this
Agreement, the position will report to Xxxx Xxxxxx, CEO of Nike, or his
successor. In that capacity, Executive will be responsible for the
global direction and management of Nike's sports marketing activities,
including the sourcing, securing, development and retention of sports
assets as part of Nike's overall marketing strategies.
B. Executive agrees to faithfully perform his initial
duties and those subsequently assigned to him by Nike to the best of his
ability, experience and talent, and to perform all the duties assigned
to him to the reasonable satisfaction of Nike.
2. Term of Employment. The term of this Agreement shall be for
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three (3) years, commencing August 1, 2006 and terminating July 31, 2009,
subject to prior termination as hereinafter provided in Paragraph 8.
3. Compensation. During the period of time Executive is
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employed by Nike under this Agreement, Executive shall be compensated as
follows:
A. Base Salary. Effective August 2006, Executive's
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initial base salary shall be at the rate of Eight Hundred Thousand
Dollars ($800,000) per annum. Effective August 2007, Executive's base
salary shall be increased to Nine Hundred Thousand Dollars ($900,000)
per annum. Effective August 2008, Executive's base salary shall be
increased to One Million Dollars ($1,000,000) per annum.
B. Performance Sharing Bonus. Executive will be
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eligible to participate in Nike's incentive bonus Performance Sharing
Plan (PSP) in accordance with the terms of the plan as follows:
Executive will have an incentive bonus target of seventy percent (70%)
of Executive's base pay received during the preceding fiscal year.
Executive's individual incentive bonus may be higher (up to one hundred
and fifty percent (150%) of target) or lower than the target amount,
depending upon company performance in relation to performance targets
set annually by the Committee. Provided Executive is employed on July
31, 2009, he will receive his 2009 fiscal year incentive bonus
notwithstanding the expiration of this Agreement.
C. Long-Term Incentive. Executive will be eligible for
a Long-Term Incentive award in accordance with the terms of the Nike
Long-Term Incentive Plan (LTIP). Executive's target award under the
LTIP is Three Hundred Thousand Dollars $300,000. Executive's Long Term
Incentive award may be higher (up to one hundred and fifty percent (150%)
of target) or lower than the target amount, depending upon company
performance in relation to performance targets set by the Committee.
Provided Executive is employed on July 31, 2009, he will receive such
Long Term Incentive award that may be due as a result of the completion
of fiscal 2009 notwithstanding the expiration of this Agreement.
4. Stock Options. Subject to the terms of the Nike, Inc. 1990
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Stock Incentive Plan, as it may be amended from time to time:
Nike agrees to grant Executive Options to purchase shares of
Nike, Inc. Class B Common Stock and Restricted Shares. Options are
granted annually in or about July of each year, provided Executive is
employed on the grant date. Restricted Shares are granted at the
discretion of the Committee, historically, for reference only, every
three years. Provided Executive remains employed, Options will vest 25
percent per year and the Restricted Shares will vest 33-1/3 percent per
year. Options and Restricted Shares have been or will be granted
pursuant to this Agreement in accordance with the following schedules:
Stock Options Fiscal '07 Fiscal '08 Fiscal '09
Annual Grant (shares) 33,000 50,000 50,000
Restricted Stock ($) Fiscal '07
July 14, 2006 Grant $1,000,000
5. Benefits. Executive shall be entitled to participate in
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Nike's 401(k) plan, medical, dental, life and disability insurance plans,
deferred compensation plan and such other benefit plans and packages
that now are or may hereafter become available to Nike Executives in
accordance with terms of those respective plans.
6. Confidentiality and Covenant Not to Compete. In 1999, upon
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bona fide advancement, Executive executed a separate "Covenant Not to
Compete and Non-Disclosure Agreement" attached as Exhibit A. It is
understood that this Covenant Not to Compete and Non-Disclosure
Agreement shall be independent of, survive the termination of, and not
be deemed modified by, this Agreement.
7. Non-Disparagement. Nike's reputation and goodwill in the
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marketplace is of utmost importance and value to Nike. Likewise,
Executive's reputation is of paramount importance to Executive.
Accordingly, during the term of this Agreement and for a period of one
year following termination of this Agreement, neither Nike nor Executive
will disparage, defame, denigrate and/or malign the other, or in Nike's
case, it's Executives or its products, in any form or manner.
Specifically, neither Nike nor Executive shall make any statement
verbally or in writing, take any action or do anything to harm, reduce
or prejudice the reputation of the other.
8. Termination.
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A. For Cause: Nike may terminate Executive's employment
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for cause at any time after delivering written notice to Executive. For
purposes of this Employment Agreement, cause shall only mean (i)
continued failure to satisfactorily perform any of Executive's material
employment duties or duties inherent in Executive's position or title,
which failure continues, after written notice given to Executive by Nike
with the opportunity to cure such failure within 30 days, (ii)
insubordination, (iii) acts of dishonesty, (iv) involvement in illegal
activities where such involvement in illegal activities violates Nike
policies, places Nike or any of its executives at risk or has or could
damage the reputation in the community of Nike or any of its related or
subsidiary companies, (v) violation of Nike's anti-harassment or anti-
discrimination policy, (vi) in carrying out Executive's duties,
Executive engages in conduct that constitutes willful gross neglect or
willful gross misconduct and that, in either case, results in material
economic harm to Nike or material harm to Nike's reputation; (vii)
violation of any material term or condition of this Agreement. Upon
termination for cause, the obligations of Nike to Executive hereunder
shall cease and Executive shall not be entitled to any severance
payments.
B. Without Cause: Nike may terminate Executive's
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employment without cause. If, however, Executive is terminated without
cause prior to conclusion of the term of this Agreement, Nike shall pay
or provide to Executive the base salary and benefits which have been
earned or become payable through the date of such termination but which
have not yet been paid to Executive. In addition, Nike shall continue
to pay Executive his then-existing base salary for a period of one year
from the effective date of the termination, plus a one time payment at
termination equal to one-hundred percent of Executive's target PSP bonus
for the applicable fiscal year; provided Executive executes a Release of
Claims. This amount shall be deemed full and final severance pay for
all services provided to Nike by Executive and shall be Executive's sole
and exclusive remedy for termination of this Agreement. If Executive
violates the Release of Claims, Nike's obligation to pay salary
continuation payments during such period immediately shall cease.
C. Executive Terminates: If Executive terminates his
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employment for Good Reason, Executive shall be entitled to severance as
if Executive were terminated Without Cause pursuant to Paragraph 8.B.
Executive shall have Good Reason to terminate only: (i) in the event of
violation of any material term or condition of this Agreement by Nike;
and/or (ii) upon a change in reporting structure or a material reduction
in the title or job responsibilities of the position described in
Paragraph 1. If Executive terminates his employment without Good Reason,
he shall not be entitled to any severance.
9. General Provisions.
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A. Entire Agreement. This Agreement constitutes the
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entire understanding between Executive and Nike and supersedes all prior
agreements or discussions between the parties. No amendment or
modification of this Agreement shall be valid unless it is in writing
referring to this Agreement and signed by both parties.
B. Severability. If any provision of this Agreement
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shall be held invalid or unenforceable by a court of competent
jurisdiction, the invalid provision(s) shall not affect any other
provision of this Agreement.
C. Assignability. This Employment Agreement is not
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assignable by either party without the written consent of the other,
except that the rights of Nike under this Agreement may be assigned to
any parent, subsidiary, successor or affiliate of Nike, which assignor
shall be bound by and comply with the terms of this Agreement.
D. Waiver. The waiver by either party of a breach of
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any provision of this Agreement shall not operate as, or be construed as,
a waiver of any subsequent breach.
E. Governing Law/Jurisdiction. This Agreement shall be
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governed by the laws of the State of Oregon without regard to choice of
law provisions. The parties consent that jurisdiction over and venue
for any dispute arising out of Executive's employment with Nike,
including but not limited to the interpretation or enforcement of this
Agreement and the termination of Executive's employment with Nike, shall
be exclusively in a state court of Washington County, Oregon.
IN WITNESS WHEREOF, the parties hereby execute this Agreement to be
effective the day and year first written above.
EXECUTIVE NIKE, Inc.
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxxx
Its: Vice President
