EXHIBIT 10.1
July 17, 2007
Mr. Ron McCray
9242 Hathaway
Dallas, TX 75220
Dear Ron:
Welcome! We are very pleased to confirm your acceptance of Nike's offer
to employ you as its Vice President and Chief Administrative Officer. We
feel that your experience and talents are valuable to NIKE, and we are
excited that you will be joining the team. As discussed, your start date
will be August 31, 2007.
We are offering you an annualized salary of $650,000 which will be paid on
bi-weekly basis.
We are also offering you a sign-on bonus of $350,000 which will be paid
along with your first paycheck. Bonus payments are subject to the
appropriate withholdings and deductions.
As a Nike employee, you will participate in our Performance Sharing Plan
(PSP). PSP is a bonus program based upon a percentage of your eligible
paid fiscal year earnings (June 1 - May 31), and is distributed in August
of each year if we achieve our Pre-Tax Income goals for the year just
concluded. The target PSP percentage for this position is 70%. This
incentive bonus will vary based upon company performance. If
extraordinary performance is achieved, you can earn up to 150% of your
target award.
Subject to approval by the Nike, Inc. Compensation Committee of the Board
of Directors, and the terms of Nike's 1990 Stock Incentive Plan, as it may
be amended from time to time, Nike will grant you an initial "sign-on"
option to purchase 50,000 shares of Nike, Inc. Class B Common Stock with
an exercise price equal to the closing market price on the date of grant.
The option will vest 25 percent per year, and have a ten year term. The
effective date of the grant will coincide with the first Compensation
Committee meeting following commencement of your employment, now scheduled
for September 17, 2007.
Subject to approval by the Nike, Inc. Compensation Committee and the terms
of Nike's 1990 Stock Incentive Plan, as it may be amended from time to
time, Nike will also grant you $800,000 worth of Nike, Inc. Class B Common
Stock, which shall be "restricted." These restricted shares will vest at
the rate of one-third per year over the three years following the date of
grant. The effective date of this "sign-on" grant will, likewise,
coincide with the first Compensation Committee meeting following
commencement of your employment, now scheduled for September 17, 2007.
On the first company-wide general stock and stock option grant date
following commencement of your employment, Nike will grant you an option
to purchase 50,000 shares of Nike, Inc. Class B Common Stock with an
exercise price equal to the closing price on the date of grant. The
number of shares and terms of the annual award will in the future be
subject to your individual performance, approval by the Nike, Inc.
Compensation Committee, and the terms of the Nike, Inc. 1990 Stock
Incentive Plan, as it may be amended from time to time. The annual grant
traditionally takes place in July, so the next grant date will be in July
2008.
Also in July 2008, Nike shall grant you $250,000 worth of Nike, Inc. Class
B Common Stock, which shall be "restricted." These restricted shares
shall be in addition to the "sign-on" restricted shares referenced above
and in this case vest at the rate of 100% per year over the one year
following the date of grant. Our restricted stock grant practice follows
a three year cycle. While the value of the grant of restricted shares is
subject to your individual performance, you are eligible for a full three
year grant the following year, July 2009.
You will be eligible to participate in Nike's Long Term Incentive Plan
(LTIP). The LTIP is designed to reward you based on Nike's Revenue and
Earnings Per Share performance over a three-year period. The plan could
pay out more or less than target depending on Nike's performance.
Applicable to the FY08 and FY09 LTIP, if extraordinary performance is
achieved, you can earn up to 150% of your target award. Applicable to the
FY10 LTIP, if extraordinary performance is achieved, you can earn up to
200% of your target award. Plan awards are made in cash at the end of the
three-year performance period.
As a Corporate Vice President, your target award will be $300,000. Since
you are joining Nike mid-way in some Plan years, your target award would
normally be pro-rated for Fiscal Years '08 and '09. However, you will
be paid an additional cash bonus each year beginning with the FY08 plan as
if you had been a full participant in each of the three years of the plan
(see chart below).
3-Year Performance Normal Target Award Target Award after
Period Award if Start July Special Make-up Bonus
FY08 LTIP FY06, FY07, FY08 $100,000 $300,000
FY09 LTIP FY07, FY08, FY09 $200,000 $300,000
FY10 LTIP FY08, FY09, FY10 $300,000 $300,000
(no pro-ration)
You will be eligible for corporate benefits starting the first day of the
month following 30 days of employment. Amongst the large suite of
corporate benefits offered, included is Nike's 401(K) and Profit Sharing
Plan. Provided you enroll in the plan, Nike will match 100% of the first
5% of your before tax contributions up to the IRS dollar limit. You are
100% vested in the 401(K) plan at all times.
In addition, Nike makes contributions to your profit sharing account. The
amount varies each year and is based on Nike's annual financial
performance results. You must be employed on June 1 and May 31 of the
plan year and you must complete 1,000 or more hours of service to be
eligible for a contribution. You become vested in your Profit Sharing
Account based on years of service and are fully vested after five years.
Deferred Compensation Plan (DCP)
________________________________
You are eligible to contribute to the DCP. This non-qualified plan offers
several investment options and provides the advantage of tax deferring a
percentage of your salary as well as eligible bonus payments. Regardless
of your personal decision to contribute, Nike shall make an annual
contribution to your DCP account in an amount equal to profit sharing plan
contributions (see above) on eligible compensation over the IRS annual
dollar limits related to qualified benefit plans.
As a Vice President, you are defined as a "key employee" under the DCP
subject to special plan provisions. Under these provisions, you will not
be able to receive a distribution until six months from the date of
separation from service. This six-month delay does not apply to
distributions on account of death, disability, or unforeseeable financial
hardship or to scheduled withdrawals. Further details on this plan will
be provided to you.
Executive Financial Services Program
____________________________________
You will be eligible to receive 50% reimbursement up to $5,000 per
calendar year for fees charged by financial service providers for time
spent giving advice and assistance in the following areas:
- Tax Planning and Tax Return Preparation
- Investment Planning
- Cash Flow Planning
- Retirement Planning
- Estate Planning
- Insurance Planning/Risk Management
Executive Travel
________________
You have the option of electing to travel first class.
Parking Space
_____________
You will also receive a reserved parking space.
Blackout and Pre-Clearance Policy
You are covered under the Nike, Inc. Blackout and Pre-Clearance Policy
(see attached for details). This policy is in addition to and supplements
the Nike, Inc. Insider Trading Policy. In the course of your job at Nike,
you may become aware of information about the Company or another company
that we do business with which is not available to the public. The use of
this information to trade in the stock of Nike or another company is
against Nike policy. It is also illegal. The type of information covered
by these standards includes any information that might influence an
investor to buy or sell Nike stock or the stock of another company with
which Nike may be doing or considering doing business. If you need
additional information, please contact John Coburn, Legal Department, at
(503) 671-3167.
Relocation Benefits
___________________
Your relocation benefits include the following:
- Van line service - full pack
- Lump sum payment of $1,000.00 (net)
- Up to 90 days temporary living accommodations
- Transportation of up to two autos
- Up to 90 days temporary storage
- Rental car up to 30 days if needed
- 1 house/apartment hunting trip
- Final trip transportation for you and your family
- Guaranteed Home Sale Program
Severance
_________
In the event Nike terminates your employment without cause and/or you
leave for Good Reason prior to August 27, 2010, and provided that (1) you
comply with the terms of your Covenant Not to Compete and Non-Disclosure
Agreement if enforced, and (2) that you execute a release of claims
satisfactory to Nike; Nike shall pay you a monthly severance payment equal
to one-hundred percent (100%) of your last monthly base salary, in effect,
payable in accordance with Nike's payroll practices for one year from the
date of your termination. In addition, Nike will pay you a PSP bonus at
100% target for the fiscal year of separation from Nike. The severance
payment, if paid, shall serve as the Additional Consideration under the
Covenant Not to Compete and Non-Disclosure Agreement, if enforced.
If your employment terminates as a result of a termination for Cause or
you leave without "Good reason", Nike shall pay or provide you only the
base salary and benefits which have been earned or become payable through
the date of such termination.
"Cause" means any one of the following: (i) fraud, (ii)
material misrepresentation in connection with performance of your job
duties, material misrepresentation in connection with performance of your
job duties, which includes but is not limited to conduct which in the
judgment of Nike creates a conflict of interest or the appearance of a
conflict of interest between you and Nike, or any act or omission in
connection with your performance of your job responsibilities or duties
under this Agreement that results in injury to the reputation , business,
business prospects, or business relationships of Nike, (iii)
insubordination (iv) theft or embezzlement, (v) your conviction of, or a
plea of guilty or no contest to, a felony under the laws of the United
States or any state thereof, (vi) violation of the terms of your Covenant
Not to Compete and Non-Disclosure Agreement, (vii) you violate Nike's anti
harassment anti discrimination policy, (viii) in carrying out your duties,
you engage in conduct that constitutes gross neglect or willful gross
misconduct and that, in either case, results in material economic harm to
Nike or material harm to Nike's reputation; (ix) your failure to
satisfactorily perform any of your material employment duties or duties
inherent in your position or title and as described above, which failure
continues, in the reasonable judgment of Nike, after written notice given
to you by Nike with the opportunity to cure such failure within 30 days.
"Good Reason" shall mean the occurrence of any of the
following, without your prior written consent and without full cure on 30
days notice from you to Nike requesting cure: (i) a material breach by
Nike of a material term of this Agreement; (ii) a material reduction in
your title, duties or responsibilities below the level of such duties and
responsibilities as are assigned at the outset of your employment;
provided that: (A) any such change in connection with the termination of
your employment for Cause or due to disability, or as a result of your
death, or voluntary termination of employment by you other than for Good
Reason, shall not constitute Good Reason, and (B) any inconsequential or
de minimis change in your duties or responsibilities shall not constitute
Good Reason.
The termination and severance provisions set forth in this letter shall
only remain in effect until and including August 27, 2010.
In the event of a voluntary termination of employment with NIKE for any
reason, all continuing relocation benefits and reimbursements will cease
as of the date of termination. In addition, if the date of termination is
within one year of the effective date of your hire date, you will be
required to repay a pro-rated portion of the relocation cost as
established by Human Resources. Your acceptance of this offer is also an
acceptance of this repayment obligation.
This offer, and your acceptance thereof, is contingent upon your
acceptance of the Covenant Not to Compete and Non-Disclosure Agreement
(enclosed). You must return a signed copy before the effective date of
your new position. This letter constitutes your offer with Nike and
supersedes all prior oral and written communications. As a part of our
agreement, you acknowledge that your employment at Nike is "at will". This
means that you may resign from Nike or Nike may end the employment
relationship at any time, with or without cause, and with or without
notice.
Ron, we feel that you have a great deal to contribute to the team and we
hope that you will find opportunity, challenge, and satisfaction in your
association with Nike, Inc. If you have any questions, please feel free
to contact me at (503) 671-2629.
Regards,
Lindsay Stewart
VP/Chief of Staff
Nike, Inc.
cc: Mark Parker