Nike (NKE)

DEFERRAL OF COMPENSATION

3.1 Participant Elections to Defer Compensation

(a) Initial Eligibility. Each Eligible Employee, Director or Consultant may elect to defer Salary or Fees by filing an election with the Administrator that conforms to the requirements of this Section 3.1, in a form provided by the Administrator, no later than the last day of his or her Initial Election Period. An election to defer Salary or Fees made during an Initial Election Period shall be irrevocable following completion of the Initial Election Period and shall be effective as to Salary and Fees earned during the remainder of the current Plan Year beginning with the first pay period beginning after the Initial Election Period.

(b) Automatic Continuation of Deferral Elections. A Compensation deferral election made under this Section 3.1 shall remain in effect, notwithstanding any change in the Participant’s Compensation, until modified or terminated at a subsequent Annual Election Period or as otherwise provided herein.

(c) Deferral Elections After Initial Election Period

(1) Annual Election Period. An Eligible Employee, Director or Consultant may elect to defer Compensation, or may modify or terminate a previous deferral election, by filing an election with the Administrator, in a form provided by the Administrator, during an Annual Election Period.

(2) Salary and Fees. A deferral election with respect to Salary or Fees made or continued during an Annual Election Period shall apply to Salary and Fees payable for services performed during the Plan Year following the Annual Election Period.

(3) Bonus. A deferral election with respect to Bonus made or continued during an Annual Election Period shall apply to Bonus payable in respect of the fiscal year commencing during the Plan Year following the Annual Election Period.

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(4) Long Term Incentive Payments. Long Term Incentive Payments generally are made in August of each year, based on actual financial performance compared against targets established by the Company or Participating Employer for a period of more than one fiscal year. The performance period is the time period specified in the agreement covering the award over which the performance of the Company or Participating Employer is measured to determine the amount of the Long Term Incentive Payment. A deferral election with respect to Long Term Incentive Payments made or continued during an Annual Election Period shall apply to Long Term Incentive Payments payable in respect of performance periods commencing during the Plan Year following the Annual Election Period. If a Long Term Incentive Payment is payable in either cash or Company stock, an election to defer the Long Term Incentive Payment shall be deemed to be an irrevocable agreement to receive the Long Term Incentive Payment in the form of cash and not as Company stock.

(5) Irrevocability. Any deferral election that is made or continued during an Annual Election Period shall be irrevocable following completion of the Annual Election Period with respect to the Compensation to which the deferral election applies.

(d) Amount of Deferral. The amount of Compensation that an Eligible Employee, Director or Consultant may elect to defer is as follows:

(1) Any whole percentage of Salary up to 100%;

(2) Any whole percentage of Bonus up to 100%;

(3) Any whole percentage of Fees up to 100%; and

(4) Any whole percentage of Long Term Incentive Payments up to 100%;

provided, however, that no election under this Section 3.1 shall be effective to reduce the Compensation paid to an Eligible Employee to an amount that is less than the total amount necessary (i) to satisfy any required withholding of applicable employment taxes (e.g., FICA contributions) payable with respect to amounts deferred hereunder, (ii) to satisfy any withholding obligations under a cafeteria plan as defined in Section 125(d) of the Code, and (iii) to satisfy any resulting income tax withholding required with respect to Compensation that cannot be deferred.

(e) Suspension or Termination of Deferrals

(1) Unscheduled Withdrawals under Old Plan. If a Participant receives an unscheduled in-service withdrawal (with 10 percent forfeiture) under the June 1, 2004 restatement of the Plan, all deferral elections of the Participant under this Plan that are then irrevocable shall remain in effect, but the Participant shall be prohibited from making or continuing any deferral elections during the next two Annual Election Periods following receipt of the unscheduled in-service withdrawal.

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(2) Hardship Withdrawal under 401(k) Profit Sharing Plan. If a Participant receives a hardship withdrawal under the 401(k) Profit Sharing Plan (or a Participating Employer’s qualified plan):

(A) all of the Participant’s deferral elections under this Plan shall be prospectively canceled so that no additional Compensation shall be deferred under those deferral elections after the date of the hardship withdrawal, and

(B) if the hardship withdrawal is received in any Plan Year after June 30 of that Plan Year, the Participant shall be ineligible to make any deferral election during the Annual Election Period occurring during that Plan Year.

(3) Loss of Eligibility. If a Participant ceases to be an Eligible Employee, Director or Consultant, all deferral elections of the Participant under this Plan that are then irrevocable shall remain in effect, but the Participant shall be ineligible to make or continue deferral elections during subsequent Annual Election Periods unless and until the Participant re-establishes eligibility as an Eligible Employee, Director or Consultant.

3.2 Company or Participating Employer Contributions

(a) Profit Sharing Eligibility. An Employee who qualifies for a profit sharing contribution for a fiscal year under the 401(k) Profit Sharing Plan (or a Participating Employer’s qualified retirement plan, if applicable) shall be eligible for a Company or Participating Employer contribution under Section 3.2(b) for such fiscal year if he or she either (1) made a deferral election under Section 3.1 that resulted in the deferral of any Salary or Bonus otherwise payable during such fiscal year, or (2) receives compensation (as defined under the 401(k) Profit Sharing Plan or a Participating Employer’s qualified retirement plan, if applicable) during such fiscal year exceeding the Code Section 401(a)(17) limit (as indexed, $225,000 for fiscal 2008), or both.

(b) Profit Sharing Make Up Contribution. An Employee who is eligible under Section 3.2(a) for any fiscal year shall be credited with a “Profit Sharing Make Up Contribution” for such fiscal year. The “Profit Sharing Make Up Contribution” shall be equal to the amount determined by multiplying (1) the percentage applied to eligible compensation in calculating the profit sharing contribution under the 401(k) Profit Sharing Plan or applicable Participating Employer’s qualified retirement plan for the fiscal year, by (2) the amount determined by subtracting the Employee’s eligible compensation used to calculate his or her profit sharing contribution under the 401(k) Profit Sharing Plan or applicable Participating Employer’s qualified retirement plan from the Employee’s compensation (as defined under the 401(k) Profit Sharing Plan or applicable Participating Employer’s qualified retirement plan) received during such fiscal year determined (A) before any reduction for deferral of Salary or Bonus under this Plan and (B) without regard to the Code Section 401(a)(17) limit.

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(c) Discretionary Contributions. In addition to contributions in accordance with Section 3.2(b), the Company or a Participating Employer may, in its sole discretion, make discretionary contributions (“Discretionary Contributions”) to the Accounts of one or more Employees, Directors or Consultants at such times, in such amounts, and subject to such vesting schedules, if any, as the Board, the Participating Employer or the Retirement Committee may determine. If the Company or a Participating Employer agrees to make a Discretionary Contribution to the Account of an Employee at a future date, and either (1) such agreement is made before the Employee becomes an Eligible Employee, or (2) the Employee is required to remain employed through the end of a fiscal year to receive the Discretionary Contribution and the agreement is made before the Annual Election Period preceding the commencement of that fiscal year, the Discretionary Contribution shall be considered an “Ongoing Discretionary Contribution” for which the form of payment on Retirement or death shall be determined under Section 6.1. On or prior to the date (the “Grant Date”) that the Company or Participating Employer makes or enters into a binding agreement to make any Discretionary Contribution that is not an Ongoing Discretionary Contribution (an “Other Discretionary Contribution”), the Company or Participating Employer must specify the form of payment (lump sum or installments) of the Other Discretionary Contribution upon Retirement or death; provided, however, that if the Other Discretionary Contribution will not be vested for at least 13 months after the Grant Date, the Participant may be given a 30-day period following the Grant Date in which the Participant may elect the form of payment for such Other Discretionary Contribution. Payments of Other Discretionary Contributions (as adjusted for Investment Returns pursuant to Section 4.1(d)) shall be made or commenced on the Payment Commencement Date. The Participant may elect an alternate form of payment (listed in Section 6.1(b)) for Other Discretionary Contributions under the procedures set forth in Section 6.1(b)(4). If an Other Discretionary Contribution becomes payable under Section 6.2(a) due to the Participant’s Separation from Service for a reason other than Retirement or death, the Other Discretionary Contribution (as adjusted for Investment Returns pursuant to Section 4.1(d)) shall be paid in a single lump sum on the Payment Commencement Date.

3.3 Investment Elections

(a) Hypothetical Investment Funds. The Retirement Committee may, in its discretion, provide each Participant with a list of investment Funds available for hypothetical investment, and the Participant may designate, in a manner specified by the Retirement Committee, one or more Funds in which his or her Account will be deemed to be invested for purposes of determining the amount of earnings to be credited to that Account. The Retirement Committee may, from time to time, in its sole discretion select a commercially available fund to substitute for the Fund actually selected. The Investment Return of each such commercially available fund shall be used to determine the amount of earnings or losses to be credited to Participants’ Accounts under Section 4.1(d).

(b) Deemed Investment Elections. In making the designation pursuant to this Section 3.3, the Participant may specify that all or any 1% multiple of his or her Account be deemed to be invested in one or more of the Funds offered by the Retirement

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Committee. Subject to such limitations and conditions as the Retirement Committee may specify, a Participant may change the designation made under this Section 3.3 in such manner and at such time or times as the Retirement Committee shall specify. If a Participant fails to elect a Fund under this Section 3.3, or if the Retirement Committee shall not provide Participants with a list of Funds pursuant to this Section 3.3, the Participant shall be deemed to have elected a money market fund.

(c) No Company Obligation. The Company may, but need not, acquire investments corresponding to those designated by the Participants hereunder, and it is not under any obligation to maintain any investment it may make. Any such investments, if made, shall be in the name of the Company, and shall be its sole property in which no Participant shall have any interest.