Offer Letter, dated October 17, 2019, between NIKE, Inc. and John J. Donahoe II

John J. Donahoe II
Address on file with the Company

Re:    Offer Letter

Dear John:

We are pleased to confirm the terms of your employment with NIKE, Inc. (the “Company”).

CEO Effective Date; Position. On January 13, 2020 (the “CEO Effective Date”), you will begin to serve as President and Chief Executive Officer (“CEO”) and will remain as a member of the Company’s Board of Directors (the “Board”). In your capacity as President and CEO, you will report directly to the Board and have all of the customary authorities, duties and responsibilities that accompany this position.

Total Direct Compensation. Commencing on the CEO Effective Date, your initial annual target direct compensation will be $18,500,000 as follows:

Sign-on Arrangements. In connection with your appointment and in consideration of compensation foregone from your current employer, you will receive the following one-time long-term award opportunities:

Other Benefits Plans. During your employment with the Company, you will be eligible to participate in the employee benefit plans and programs of the Company applicable to senior executives of the Company generally as may be in effect from time to time including, without limitation, participation in the Company’s Relocation Policy and employee charitable matching program, provided that for purposes of such program, your annual contribution limit will be $1 million and the Company will match such contributions on a 4:1 basis. The Company will pay or reimburse your business expenses incurred in accordance with the policies applicable to senior executives of the Company generally as in effect from time to time. For the avoidance of

doubt, your service for purposes of any retirement provisions, including but not limited to such provisions in any award agreements, will commence on the CEO Effective Date.

Covenant Not to Compete. As a condition to your service, you will enter into the Covenant Not to Compete agreement in Annex B (the “Non-Compete Agreement”).

Employee Invention and Secrecy Agreement. As a condition to your service, you will enter into the Employee Invention and Secrecy Agreement in Annex C.

Company Policies. You will be subject to all policies of the Company, including, without limitation, any stock ownership guidelines and incentive compensation clawback policies applicable to senior executives of the Company, as each policy is adopted or amended from time to time.

Cooperation. You agree (whether during or after your employment with NIKE) to reasonably cooperate with NIKE in connection with any litigation or regulatory matter or with any government authority on any matter, in each case, pertaining to NIKE and with respect to which you may have relevant knowledge; provided that, in connection with such cooperation, NIKE will reimburse your reasonable expenses and you shall not be required to act against your own legal interests.

Legal Fees.  The Company will reimburse you for reasonable legal fees and expenses incurred by you in connection with the negotiation and preparation of this Offer Letter and your transition from your current position in an amount not exceeding $60,000 as soon as reasonably practicable following the date hereof.

Dispute Resolution. With respect to disputes, the parties will endeavor in good faith to resolve any controversy or claim arising out of or relating to this Offer Letter for at least 30 days after written request by either party. After such 30-day period, all disputes that are not resolved by the parties will be finally settled by arbitration in Portland, Oregon in accordance with the commercial arbitration rules of the American Arbitration Association (the “AAA”). For disputes of a value less than $350,000, a single arbitrator shall be chosen.  For disputes of a value of $350,000 or more, three arbitrators shall be chosen.  If the parties cannot agree on a single arbitrator, the AAA shall select the arbitrator. In the case of three arbitrators, each party shall appoint an arbitrator and the two arbitrators so chosen shall jointly appoint a third arbitrator to join them in resolving the dispute.  This Offer Letter to arbitrate shall be specifically enforceable under the prevailing arbitration law.  The award rendered by the arbitrator(s) shall be binding and final, and judgment may be entered upon it in accordance with applicable law in any state or federal court located in Oregon.  The costs of arbitration (including the arbitrators’ fees) shall be borne by the non-prevailing party, as determined by the arbitrators; provided that, each party shall be solely responsible for their own attorneys’ fees, including those incurred in connection with any arbitration. This Offer Letter to arbitrate shall not prevent either party from applying to a state or federal court located in Oregon for a temporary restraining order, preliminary injunction or other equitable relief to preserve the status quo or prevent irreparable harm. For the avoidance of doubt, any dispute, controversy or claim arising out of or relating to the Non-Compete Agreement shall be governed by, and construed in accordance with, the terms set forth therein.

Tax Withholding. The Company may withhold from any amounts payable to you under this Offer Letter or otherwise such United States federal, state or local or foreign taxes as will be required to be withheld pursuant to any applicable law or regulation.

Indemnification. During and after your employment, the Company will indemnify you in your capacity as an officer and member of the Board to the maximum extent permitted under the Company’s charter, by-laws and applicable law and will provide you with director and officer liability insurance coverage on the same basis as the Company’s other executive officers or directors.

Miscellaneous Representations. You confirm and represent to the Company, by signing this Offer Letter, that (1) you are under no obligation or arrangement (including any restrictive covenants with any prior employer or any other entity) that would prevent you from becoming an employee of the Company or that would adversely impact your ability to perform the expected services on behalf of the Company; (2) you have not taken (or failed to return) in an unauthorized manner any confidential information belonging to your prior employer or any other entity, and, to the extent you remain in possession of any such information, you will never use or disclose such information to the Company or any of its employees, agents or affiliates; and (3) you understand and accept all of the terms and conditions of this Offer Letter.

Entire Agreement; Amendments; Counterparts. This Offer Letter constitutes the entire agreement of the parties related to the subject matter hereof and supersedes all prior agreements. This Offer Letter may only be amended or modified by a written agreement signed by you and a duly authorized officer of the Company. This Offer Letter may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same.

Governing Law and Employment “At Will”. This Offer Letter and your employment will be governed by Oregon law, without reference to principles of conflict of laws. This Offer Letter is not a guarantee of employment or target director compensation for a fixed term.

We look forward to your leadership.

Sincerely,
NIKE, Inc.

I agree with and accept the foregoing terms.

John J. Donahoe II

Pursuant to the Stock Incentive Plan (the “Plan”) of NIKE, Inc., an Oregon corporation (the “Company”), the Company grants to the individual listed below (the “Participant”) the right and the option (the “Option”) to purchase all or any part of the total shares (“Shares”) of the Company’s Class B Common Stock (the “Award”) granted per the terms and conditions of this agreement between the Company and the Participant (this “Agreement”). By accepting this Option grant, the Participant agrees to all of the terms and conditions of the Plan. Capitalized terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

The Award will vest if the value of a Share increases by at least twenty percent, based on a 30-trading-day average closing price divided by the closing price of a Share on the Grant Date (the “Performance Metric”), subject to Participant’s continued employment through the applicable vesting date, as follows:

The Committee shall have the sole discretion to place a Participant on paid leave for up to 90 days, pending the determination by the Committee, in its reasonable determination, of whether there is a basis for the Company to terminate the Participant’s employment for Cause.

NIKE, Inc.

By: _______________________________

Name: [●]

    

PARTIES:

John J. Donahoe II (“Employee”)

NIKE, Inc., and its parent, divisions, subsidiaries and affiliates (“NIKE” or the “Company”, and together with Employee, the “Parties”)

DATE: October 17, 2019

RECITALS:

A.    This Covenant Not to Compete and Non-Disclosure Agreement (the “Agreement”) is executed upon Employee’s bona fide advancement with NIKE and is a condition of such advancement and is effective as of January 13, 2020. Employee acknowledges that he was informed in a written job offer at least two weeks before starting work in his new position that this Covenant Not to Compete and Non-Disclosure Agreement is required and is a condition of advancement.

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 particular 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, and this Agreement will remain in effect until Employee leaves the Company or it is superseded by a new written agreement executed by the Parties.

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 offer letter, employment contract or otherwise, and for eighteen (18) 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, sports electronics/technology and sports accessories business, or any other business that directly competes with NIKE or any of its parent, subsidiary or affiliated corporations (“Competitor”). 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 1.5 below for 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 shall 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, in its sole discretion, 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 written notice of such election; provided, however, unless Employee is terminated for Cause (as defined below), 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 or the definition of Competitor is limited, 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 Definition of “Cause”. For purposes of this Agreement, the Company will have “Cause” to terminate Employee’s employment upon Employee’s:

1.5 Additional Consideration.

under this Agreement, and the covenant not to compete will remain enforceable. Nothing in this paragraph or Agreement alters the employment-at-will relationship between NIKE and Employee.

If Employee voluntarily terminates employment and NIKE elects to enforce the non-competition agreement, NIKE shall (subject to subparagraph (b) below) 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.

Subject to subparagraph (b) below, payments during the Restriction Period shall be payable monthly on the last business day of the month in accordance with NIKE’s payroll practices.

1.6 Withholding and Offset. NIKE reserves the right to withhold from additional consideration payable to Employee all federal, state and local taxes as shall be required, as well as any other amounts authorized or required by NIKE policy. NIKE reserves the right, exercisable in its sole discretion, to reduce the amount of additional consideration by amounts that Employee owes NIKE, including but not limited to any payments due to NIKE in accordance with the NIKE Tax Equalization Policy if Employee is employed as a transferee during his employment with NIKE. Employee agrees that notwithstanding the amount of any withholding and/or offset, even in an amount that reduces payments of additional consideration to zero dollars ($0.00), the covenant not to compete will remain enforceable. To the extent withholding or offset does not extinguish amounts that Employee owes to NIKE, Employee remains obligated for the balance of the amounts owed.

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 that 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 trade secrets and competitively sensitive business or professional information (regardless of whether such information constitutes a trade secret) 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 or strategy, product development plans, product launch plans, financial information, sales 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, Employee shall be permitted to retain as part of his personal portfolio copies of Employee’s 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 shall 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 shall hold in confidence and protect all Protected Information and shall not, at any time, directly or indirectly, use any 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 shall 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 shall also take reasonable security precautions and such other actions as may be necessary to ensure 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 any time, and in any event, upon termination of employment, Employee shall immediately return to NIKE all Protected Information in whatever form, including tapes, notebooks, drawings, digital files or other media 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 shall 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 shall 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 1.5 of this Agreement.

6.    Non-Recruitment. During the term of this Agreement and for a period of one (1) year thereafter, Employee shall 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 or any independent contractor working for NIKE.

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 that 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 1.5 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 shall be effective unless executed in writing by both Parties. No written waiver shall excuse the performance of any act other than the act or acts specifically referred to therein.

8.3 Severability. Each provision herein shall be treated as a separate and independent clause and unenforceability of any one clause shall 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 shall 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: John J. Donahoe II

NIKE, Inc.

By: _______________________________

Name: [●]

Title: [●]

The parties have executed this Agreement on October 17, 2019, to be effective on January 13, 2020, by placement of their physical or electronic signatures below (if using an electronic signature, please use the form “/s/[name]”):