EXHIBIT 10.1
NIKE, INC.
FY _______ LONG-TERM INCENTIVE AWARD AGREEMENT
This
FY _______ Long-Term Incentive Award Agreement (this
"Agreement") is entered into as of _____________, 20__, between
NIKE,
Inc., an Oregon corporation (the "Company"), and ________
("Recipient").
On
_________, 20__, the Compensation Committee (the "Committee")
of the Company's Board
of Directors authorized a performance-based
award to Recipient pursuant to Section 6 of the Company's
Long-Term
Incentive Plan (the "Plan"). Compensation paid pursuant to the
award
is intended to qualify as performance-based compensation under
Section
162(m) of the Internal Revenue Code of 1986, as amended (the
"Code").
Recipient desires to accept the award subject to the terms and
conditions of this Agreement.
NOW,
THEREFORE, the parties agree as follows:
1.
Award. Subject to the
terms and conditions of this
_____
Agreement, the Company shall pay to Recipient the dollar amount
(the
"Dollar Target Award Payment") determined under this Agreement
based on
(a) the Company's financial performance during the _______-year
period
from June 1, 20__ to May 31, 20__ (the "Performance Period") as
described in Section 2 and (b) Recipient's continued employment
during
the Performance Period as described in Section 3. Recipient's "Dollar
Target Award" for purposes of this Agreement is $___________.
2.
Revenue and EPS Performance Conditions.
______________________________________
2.1 Subject to
Section 3, the Dollar Target Award Payment
to be paid to Recipient shall be determined by multiplying the
Payout
Factor by the Dollar Target Award. The "Payout Factor" equals the
average of the Revenue-Related Percentage Level for the
Performance
Period and the EPS-Related Percentage Level for the Performance
Period.
The Revenue-Related Percentage Level for the Performance Period
shall
be determined under the table below based on the Company's
Cumulative
Revenue (as defined below) for the Performance Period. The EPS-Related
Percentage Level for the Performance Period shall be determined
under
the table below based on the Company's Cumulative EPS (as defined
below)
for the Performance Period. For example, if the Company's
Cumulative
Revenue for the Performance Period is $_______ and the
Company's
Cumulative EPS for the Performance Period is $_______, then the
Revenue-Related Percentage Level will be 110%, the EPS-Related
Percentage Level will be 140%, and the Payout Factor will
therefore
equal 125%.
Revenue-Related
EPS-Related
Cumulative Revenue Percentage Level
Cumulative EPS
Percentage Level
__________________ ________________
______________
________________
(in millions)
Less than $____
0%
Less than $____
0%
$____
10%
$____
10%
$____
20%
$____
20%
$____
30%
$____
30%
$____
40%
$____
40%
$____
50%
$____
50%
$____
60%
$____
60%
$____
70%
$____
70%
$____
80%
$____
80%
$____
90%
$____
90%
$____
100%
$____
100%
$____
110%
$____
110%
$____
120%
$____
120%
$____
130%
$____
130%+
$____
140%
$____
140%
$____ or more
150%
$____ or more
150%
If
the Company's Cumulative Revenue is between any two data points
set forth in the first column of the above table, the
Revenue-Related
Percentage Level shall be determined by interpolation between
the
corresponding data points in the second column of the table as
follows:
the difference between the Cumulative Revenue and the lower data
point
shall be divided by the difference between the higher data point
and
the lower data point, the resulting fraction shall be multiplied by
the
difference between the two corresponding data points in the
second
column of the table, and the resulting product shall be added to
the
lower corresponding data point in the second column of the table,
with
the resulting sum being the Revenue-Related Percentage Level.
If the
Company's Cumulative EPS is between any two data points set forth
in
the third column of the above table, the EPS-Related Percentage
Level
shall be similarly determined by interpolation between the
corresponding data points in the fourth column of the table.
For
example, if the Company's Cumulative Revenue is $_______ and
the
Company's Cumulative EPS is $_______, then the Revenue-Related
Percentage Level will be 115%, the EPS-Related Percentage Level
will be
135%, and the Payout Factor will therefore equal 125%.
2.2 Subject to
adjustment in accordance with Sections 2.4,
2.5 and 2.6 below, the Company's "Cumulative Revenue" for the
Performance Period shall equal the sum of the Company's revenues
for
the _______ fiscal years of the Company in the Performance Period.
For
this purpose, the Company's revenues for each fiscal year of
the
Company during the Performance Period shall be as set forth in
the
audited consolidated financial statements of the Company and
its
subsidiaries.
2.3 Subject to
adjustment in accordance with Sections 2.4,
2.5 and 2.6 below, the Company's "Cumulative EPS" for the
Performance
Period shall equal the sum of the Company's diluted earnings per
common
share for the _______ fiscal years of the Company in the
Performance
Period. The Company's
diluted earnings per common share for each
fiscal year of the Company during the Performance Period shall be
as
set forth in the audited consolidated financial statements of
the
Company and its subsidiaries.
2.4 In the event
that any acquisition of a business shall
occur during the Performance Period, the Company's Cumulative
Revenue
for the Performance Period shall be appropriately adjusted to
exclude
the revenues of the acquired business, and the Company's Cumulative
EPS
for the Performance Period shall be appropriately adjusted to
approximate the Cumulative EPS as if the acquisition had not
occurred,
by (a) excluding any costs of the acquisition recorded by the
Company,
(b) excluding the operating income of the acquired business,
(c)
reducing interest expense for any cash paid or debt incurred to
fund
the acquisition based on the actual interest rate of such debt or
the
Company's average interest rate for borrowed funds, (d) adjusting
the
tax provision to reflect the adjusted amount of pre-tax income
after
making the above adjustments, and (e) reducing weighted average
shares
outstanding used for the EPS calculation by the number of
Company
shares, if any, issued in the acquisition.
2.5 In the event
that any divestiture of a business shall
occur during the Performance Period, the Company's Cumulative
Revenue
for the Performance Period shall be appropriately adjusted as
provided
in Section 2.5(i) below to reflect an assumed level of revenue of
the
divested business for that portion of the Performance Period
occurring
after the divestiture, and the Company's Cumulative EPS for the
Performance Period shall be appropriately adjusted (a) to exclude
any
gain or loss on the sale, (b) as provided in Section 2.5(ii) below
to
reflect an assumed level of operating income of the divested
business
for that portion of the Performance Period occurring after the
divestiture, (c) to reduce interest income for any cash or
notes
received in the divestiture based on the actual interest rate on
such
notes or the Company's average interest rate for borrowed fu
