EXHIBIT 10.2
Amended portions of the agreement below are indicated with underscore.
COVENANT NOT TO COMPETE
AND NON-DISCLOSURE AGREEMENT
AS AMENDED
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PARTIES:
Xxxxxxx X. Xxxxxx (EMPLOYEE)
NIKE, Inc., and its parent, divisions,
subsidiaries and affiliates (NIKE)
DATE: December 28, 2004
RECITALS:
A. This Covenant Not to Compete and Non-Disclosure Agreement is
executed upon the EMPLOYEE's advancement to the position of President of
the NIKE brand and is a condition of such advancement.
B. Over the course of EMPLOYEE's employment with NIKE, EMPLOYEE
will be or has been exposed to and/or 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 Protective Information throughout the
world. Protective 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.
(a) 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
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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, Champion, Oakley, DKNY,
Converse, Asics, Saucony, New Balance, Xxxxx Lauren/Polo Sport, B.U.M.,
FUBU, The Gap, Xxxxx Xxxxxxxx, Umbro, Northface, Venator (Footlockers),
Sports Authority, Columbia Sportswear, Xxxxxx, Mizuno, Callaway Golf and
Titleist. This provision is subject to NIKE's option to waive all or
any portion of the Restriction Period as more specifically provided
below.
(b) 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(d) 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.
(c) 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; provided, however, unless EMPLOYEE is
terminated "for cause" (which shall only include continual and repeated
neglect of duties and 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.
(d) Additional Consideration. As additional
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consideration for the Covenant Not To Compete described above, should
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Nike terminate EMPLOYEE's employment and the Covenant Not To Compete is
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enforced, Nike shall pay EMPLOYEE a monthly payment equal to one-twelfth
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(1/12) of EMPLOYEE's then current Annual Nike Income (defined herein to
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mean base salary and annual Performance Sharing Plan bonus calculated at
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100% of EMPLOYEE's targeted rate) while the Restriction Period is in
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effect. If EMPLOYEE voluntarily terminates employment and the Covenant
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Not To Compete is enforced, Nike shall pay EMPLOYEE a monthly payment
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equal to one-twenty-fourth (1/24) of EMPLOYEE's then current Annual Nike
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Income while the Restriction Period is in effect; provided, however, if
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EMPLOYEE voluntarily terminates employment after December 31, 2006, but
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prior to December 31, 2007, and the Covenant Not To Compete is enforced,
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Nike shall pay EMPLOYEE a monthly payment equal to one-twelfth (1/12) of
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EMPLOYEE's then current Annual Nike Income while the Restriction Period
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is in effect.
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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.
(a) 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, 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 information,
methods of operation, manufacturing processes and methods, products, and
personnel information.
(b) Excluded Information. Notwithstanding paragraph
3(a), 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.
(c) 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(d) 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 (d) 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.
(a) Survival. This Agreement shall continue in effect
after the termination of EMPLOYEE's employment, regardless of the reason
for termination.
(b) 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.
(c) 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.
(d) Applicable Law/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 NIKE, Inc.
By: ___________________________ By: __________________________
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: President, NIKE Brand Title: President & CEO
