EXHIBIT 10.1
AMENDED AND RESTATED
COVENANT NOT TO COMPETE
AND NON-DISCLOSURE AGREEMENT
PARTIES:
Xxxx X. Xxxxxx (Employee)
NIKE, Inc., and its parent, divisions, subsidiaries and affiliates
(NIKE)
DATE: July 24, 2008
RECITALS:
A. Employee and NIKE are parties to a Covenant Not to Compete and
Non-Disclosure Agreement dated as of February 28, 2006 (the "Prior
Agreement"). The Prior Agreement was executed upon the Employee's
advancement to the position of President and Chief Executive Officer of
NIKE and was a condition of such advancement. In order to comply with
the provisions of Section 409A of the Internal Revenue Code of 1986 and
thereby avoid the tax penalties to Employee that would result from
failure to comply, Employee and NIKE wish to amend and restate the
Prior Agreement in the form of this Amended and Restated Covenant Not
to Compete and Non-Disclosure Agreement (the "Amended and Restated
Agreement"). As more fully described in paragraph 8.5 below, Employee
agrees that the Prior Agreement remains in full force and effect and
was entered into upon a bona fide 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 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.
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1.1 Competition Restriction. During Employee's employment by
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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
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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 for any period
of time in which this Amended and Restated 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
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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.
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(a) 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 (subject to
subparagraph (b) below) 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
(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.
(b) Section 409A of the Internal Revenue Code requires that the
monthly payments to Employee set forth in subparagraph (a) above may
not commence until six months after Employee's "separation from
service" as defined in Treasury Regulations (Section) 1.409A-1(h).
Failure to follow this requirement will result in substantial tax
penalties to Employee. Accordingly, the commencement of these payments
will be delayed until after the six-month period following Employee's
separation from service in order to comply with Section 409A and avoid
tax penalties for Employee. All payments that Employee would otherwise
have received before the date that is six months after Employee's
separation from service will be accumulated by NIKE and paid to
Employee in a lump sum promptly following the end of the six-month
period, together with interest at a fluctuating rate per annum equal to
the prime rate as published from time to time in The Wall Street
Journal on these delayed payments from the date otherwise payable under
subparagraph (a) until the date actually paid.
2. Subsequent Employer. Employee agrees to notify NIKE at the
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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.
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3.1 Protectable Information Defined. "Protected Information"
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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,
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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
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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 Amended and Restated Agreement.
4. Return of Protected Information. At the request of NIKE at
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any time, 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
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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 Amended and Restated Agreement.
6. Non-Recruitment. During the term of this Amended and
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Restated 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
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should violate any term of this Amended and Restated 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.
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8.1 Survival. This Amended and Restated Agreement shall
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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
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of any term or condition of this Amended and Restated 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
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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 Amended and Restated 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 Amended and Restated
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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 Amended and Restated Agreement shall lie in the state and
federal courts located in Oregon.
8.5 Prior Agreement Remains Fully Valid and Enforceable. This
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Amended and Restated Agreement does not supersede the Prior Agreement
except to the extent that the terms of this Amended and Restated
Agreement conflict with the terms of the Prior Agreement, in which case
the terms of this Amended and Restated Agreement shall control. Other
than with respect to the terms that conflict with this Amended and
Restated Agreement, the terms of the Prior Agreement remain fully valid
and enforceable.
Employee
/s/ Xxxx X. Xxxxxx
By: _______________________________
Name: Xxxx X. Xxxxxx
NIKE, Inc.
/s/ Xxxxxx X. Xxxxxx
By: _______________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board
