COVENANT NOT TO COMPETE
AND NON-DISCLOSURE AGREEMENT
PARTIES:
Xxxx X. Xxxxxx (EMPLOYEE)
NIKE, Inc., an Oregon corporation, and its divisions,
subsidiaries and affiliates (NIKE)
DATE: October 6, 1994
RECITALS:
A. This Covenant Not to Compete is executed upon the
EMPLOYEE's assumption of additional responsibilities for worldwide
marketing and development activities of NIKE.
B. Over the course of EMPLOYEE's employment with NIKE,
EMPLOYEE will be or has been exposed to and/or in a position to
generate confidential information including but not limited to
confidential techniques, methods, styles, designs and design concepts,
developments, customer lists, vendor lists, contract factory lists,
pricing information, manufacturing plans, business plans, marketing
plans, sales information, methods of operation, knowledge and data
relating to processes, products, machines, compounds and compositions,
formulae, lasts and molds. It is anticipated that EMPLOYEE will
continue to be exposed to confidential information, will be exposed to
more confidential information and to confidential information of
greater sensitivity as EMPLOYEE advances in the company. This
confidential information is information peculiar to NIKE's business.
The nature of NIKE's business is highly competitive and disclosure of
any confidential information would result in severe damage to NIKE and
be difficult to measure.
C. NIKE makes use of the confidential information
described in paragraph B above throughout the world. This confidential
information of NIKE can be used to NIKE's detriment anywhere in the
world.
D. The provisions of this Covenant Not to Compete and
Non-Disclosure Agreement are a condition of EMPLOYEE's employment
advancement with NIKE.
E. The provisions of this Covenant Not to Compete and
Non-Disclosure Agreement are reasonable.
AGREEMENTS:
1. COVENANT NOT TO COMPETE. During the period of time
EMPLOYEE is employed by NIKE, under the terms of any employment
contract or otherwise, and for one (1) year thereafter, EMPLOYEE will
not directly or indirectly, own, manage, operate, join, control, or
participate in the ownership, management, operation or control of, or
be employed by or connected in any manner with, any business engaged
anywhere in the world in the athletic footwear business, athletic
apparel business, or any other business which directly competes with
NIKE or any of its subsidiaries or affiliated corporations. This
provision is (a) subject to NIKE's option to waive, but only with the
concurrence of the EMPLOYEE, all or any portion of the one (1) year
time period of non-competition following termination more specifically
provided for in paragraph 2; and (b) subject to NIKE's option to
specifically identify, at the time of termination, those businesses
which EMPLOYEE may not be employed by or connected with for the period
of non-competition. NIKE agrees to act in good faith in its exercise
of the above-noted options.
2. ADDITIONAL CONSIDERATION.
a. As additional consideration for the covenant
not to compete described in paragraph 1 above, it is agreed that:
(i) If EMPLOYEE voluntarily leaves the
employ of NIKE at any time during the term hereof, NIKE shall pay
EMPLOYEE an amount per month equal to one-twenty-fourth (1/24) of
EMPLOYEE's then current "Annual NIKE Income" (defined herein to mean
base salary and bonuses received by EMPLOYEE during the twelve (12)
month period immediately preceding termination), or $20,833.34 per
month, whichever is greater, for the one (1) year period of non-
competition following voluntary termination of employment, payable on
the first day of each month, or
(ii) If EMPLOYEE is involuntarily
terminated by NIKE at any time during the term hereof, either with or
without cause, NIKE shall pay EMPLOYEE an amount per month equal to
one-twelfth (1/12) of EMPLOYEE's then current Annual NIKE Income, or
$41,666.67 per month, whichever is greater, for the one (1) year period
of non-competition following involuntary termination of employment,
payable on the first day of each month.
b. NIKE may waive all or any portion of the one
(1) year period of non-competition following termination, subject to
the following provisions:
(i) At any time during, or prior to the
commencement of, the one (1) year period, NIKE may tender to EMPLOYEE
thirty (30) days written notice of its desire to waive all or the then
remaining portion of the one (1) year period of non-competition.
Within the thirty (30) day notice period, EMPLOYEE will have the option
of accepting or rejecting NIKE's tender by advising NIKE in writing of
EMPLOYEE's election to accept the waiver, in which event EMPLOYEE would
be free to compete at the end of the thirty (30) day notice period and
all payments to EMPLOYEE hereunder would cease, or to reject the
waiver, in which event EMPLOYEE would continue to be prohibited from
competing for the remaining portion of the one (1) year period of non-
competition and payments to EMPLOYEE would continue as herein provided.
(ii) However, notwithstanding anything
contained in subparagraph 2(b)(i) above, if EMPLOYEE is terminated by
NIKE "for cause" (defined herein to include only continual and repeated
neglect of duties and dishonesty) NIKE shall have the unqualified right
to waive, without EMPLOYEE's consent, all or any portion of the one (1)
year period of non-competition following termination, by giving
EMPLOYEE written notice of such election not less than thirty (30) days
prior to the effective date of the waiver. In that event, NIKE shall
not be obligated to pay EMPLOYEE hereunder for any months as to which
the covenant not to compete has been waived.
3. LESSER RESTRICTIONS. Should any of the terms of
paragraphs 1 and 2 above be found unreasonable or invalid by any court
of competent jurisdiction, the parties agree to accept as binding, in
lieu thereof, the maximum terms enforceable by law.
4. EXTENSION OF TIME. The covenant not to compete
described in paragraphs 1, 2 and 3 above shall be extended by a time
period equal to any time consumed in enforcement of the obligations
hereunder during which EMPLOYEE engaged in activities violating the
covenant not to compete.
5. NON-DISCLOSURE AGREEMENT. During the period of
employment by NIKE and forever thereafter, EMPLOYEE will hold in
confidence all information of a confidential nature, including but not
limited to the information described in Recital "B", (all of which
information of a confidential nature shall hereinafter be referred to
as "confidential information") and will not, any time, directly or
indirectly, use any confidential information for any purpose outside
the scope of EMPLOYEE's employment with NIKE or disclose any
confidential information to any 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 confidential information without the prior written
consent of NIKE.
6. RETURN OF CONFIDENTIAL INFORMATION. Upon
termination and upon written request by NIKE at any time, EMPLOYEE
shall return to NIKE all documents, records, notebooks and other
similar repositories of or containing confidential information,
including all copies thereof, then in EMPLOYEE's possession, whether
prepared by EMPLOYEE or others, and deliver to NIKE any and all other
confidential information, in whatever form, that may be in EMPLOYEE's
possession or under EMPLOYEE's control.
7. UNAUTHORIZED USE. During the period of employment
with NIKE and thereafter, EMPLOYEE shall notify NIKE immediately of the
unauthorized possession, use or knowledge of any confidential
information by any person employed or not employed by NIKE at the time
of such possession, use or knowledge. EMPLOYEE shall promptly furnish
details of such possession, use or knowledge to NIKE, will assist in
preventing the reoccurrence of such possession, use or knowledge, and
shall cooperate with NIKE in any litigation against third parties
deemed necessary by NIKE to protect the confidential information.
EMPLOYEE's compliance with this paragraph shall not be construed in any
way as a waiver of any of NIKE's rights or remedies against EMPLOYEE
arising out of or related to such unauthorized possession, use or
knowledge.
8. INJUNCTIVE RELIEF. The remedy at law for any
breach of this Covenant Not to Compete and Non-Disclosure Agreement
will be inadequate. It is reasonable to require that EMPLOYEE not
compete with NIKE in order to protect NIKE from unfair use of the
confidential information. NIKE shall be entitled to injunctive relief
in addition to any other remedy it may have. A breach of this Covenant
Not to Compete and Non-Disclosure Agreement during the period of
EMPLOYEE's employment in addition to any other rights or remedies NIKE
may have.
9. WAIVER, AMENDMENT, MODIFICATION OR CANCELLATION. No
waiver, amendment, modification or cancellation of any term or
condition of this Covenant Not to Compete and Non-Disclosure Agreement
shall be effective unless executed in writing by the party charged
therewith. No written waiver shall excuse the performance of any act
other than the act or acts specifically referred to therein.
10. APPLICABLE LAW/JURISDICTION/VENUE. This Covenant
Not to Compete and Non-Disclosure Agreement, and EMPLOYEE's employment
hereunder, shall be construed according to the laws of the state of
Oregon and EMPLOYEE hereby submits to the jurisdiction of the courts of
the state of Oregon and waives application of any foreign law relating
to this Agreement and EMPLOYEE's employment by NIKE. Any suit or
action of any kind relating to this Agreement or the subject matter
hereof shall be brought in a court located in Washington County,
Oregon.
EMPLOYEE NIKE, Inc.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
_______________________ _________________________
Name: Xxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
