EXHIBIT 10.1
COVENANT NOT TO COMPETE
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AND NON-DISCLOSURE AGREEMENT
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PARTIES:
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Gary DeStefano ("EMPLOYEE")
and
NIKE, Inc., and its parent, divisions,
subsidiaries, affiliates, successors and assigns. ("NIKE"):
RECITALS:
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A. This Covenant Not to Compete and Non-Disclosure Agreement is
executed upon the EMPLOYEE's bona fide advancement with NIKE and is a
condition of such advancement. Employee acknowledges that this Covenant
Not to Compete and Non-Disclosure Agreement is a condition of
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 Protected Information throughout the
world. Protected Information of NIKE can be used to NIKE's detriment
anywhere in the world.
AGREEMENT:
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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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(a) Competition Restriction. During EMPLOYEE's employment
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by NIKE, under the terms of any employment contract or otherwise, and
for 1 year 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 which directly competes with NIKE or any of its parent,
subsidiaries or affiliated corporations (a "Competitor"). By way of
illustration only, examples of NIKE competitors include, but are not
limited to: Adidas, FILA, Reebok, Puma, Skechers, KSwiss, Garmin, Polar,
Merrell, Timberland, Champion, Oakley, DKNY, Asics, Saucony, New Balance,
Ralph Lauren/Polo Sport, B.U.M, FUBU, The Gap, Tommy Hilfiger, Umbro,
The North Face, Foot Locker, Finish Line, Sports Authority, Footaction,
Columbia Sportswear, Under Armour, Wilson, 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 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(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
after 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, in its
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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 notice of such election. 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 consideration
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for the covenant not to compete described above, should NIKE terminate
EMPLOYEE's employment and elect to enforce the non-competition agreement,
NIKE shall pay EMPLOYEE a monthly payment while the Restriction Period
is in effect equal to one-twelfth (1/12) of EMPLOYEE's then current
annual base salary and annual Performance Sharing Plan bonus calculated
at 100% of EMPLOYEE's last targeted rate. If EMPLOYEE voluntarily
terminates employment and NIKE elects to enforce the non-competition
agreement, NIKE shall pay EMPLOYEE a monthly payment while the
Restriction Period is in effect equal to one-twenty-fourth (1/24) of
EMPLOYEE's then current annual base salary. The first payment to
EMPLOYEE of additional consideration shall follow on the next applicable
pay period after the election to enforce the non-competition agreement,
payable in accordance with NIKE's payroll practices.
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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(a) Protected 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, confidential techniques, methods,
styles, designs, design concepts and ideas, customer and vendor lists,
contract factory lists, pricing information, manufacturing plans,
business and marketing plans, financial information, sales information,
methods of operation, manufacturing processes and methods, products, and
personnel information.
(b) Excluded Information. Notwithstanding paragraph 3(a),
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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
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
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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 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 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
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anytime, 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
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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(d) of
this Agreement.
6. Non-Recruitment. During the term of this Agreement and for a
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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 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 the 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.
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(a) Survival. This Agreement shall continue in effect
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after the termination of EMPLOYEE's employment, regardless of the reason
for termination.
(b) Waiver. No waiver, amendment, modification or
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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
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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
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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.
/s/ Gary DeStefano /s/ Wesley A. Coleman
Name: Gary DeStefano By: Wesley A. Coleman
DATE: August 7, 2006 Title: Vice President