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%.
<TABLE>
<CAPTION>
<C>
<C>
<C>
<C>
Revenue-Related
EPS-Related
Cumulative Revenue Percentage Level
Cumulative
EPS
Percentage Level
__________________ ________________
______________ ________________
(in millions)
Less than $____
0%
Less than $____
0%
$____
10%
$____
10%
$____
20%
$____
20%
Revenue-Related
EPS-Related
Cumulative Revenue Percentage Level
Cumulative
EPS
Percentage Level
__________________ ________________
______________ ________________
(in millions)
$____
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%
</TABLE>
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 funds, and (d)
to adjust the tax provision to reflect the
adjusted amount of pre-tax
income after making the above
adjustments.
(i)
The Company's Cumulative Revenue for the
Performance Period shall be appropriately
adjusted to include the
Imputed Revenues of the divested business.
"Imputed Revenues"
shall
mean the result obtained by multiplying the
Average Daily Revenues of
the divested business by the number of
calendar days in the Performance
Period occurring after the divestiture.
"Average Daily
Revenues" shall
mean the result obtained by dividing (x)
the revenues of the divested
business during that portion of the
Performance Period occurring prior
to the divestiture by (y) the number of
calendar days in the
Performance Period occurring prior to the
divestiture.
(ii) The
Company's Cumulative EPS for the Performance
Period shall be appropriately adjusted to
reflect the Imputed Operating
Income of the divested business.
"Imputed Operating
Income" shall mean
the result obtained by multiplying the
Average Daily Operating Income
of the divested business by the number of
calendar days in the
Performance Period occurring after the
divestiture. "Average
Daily
Operating Income
