Nike (NKE)

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

An agreement between the Company and President and Chief Executive Officer Mark G. Parker contains a covenant not to compete that extends for two years following the termination of his employment with the Company. The agreement provides that if Mr. Parker’s employment is terminated by the Company, the Company will make monthly payments to him during the two-year noncompetition period in an amount equal to one-twelfth of his then current annual salary and target performance bonus (“Annual Nike Income”). The agreement provides further that if Mr. Parker voluntarily resigns, the Company will make monthly payments to him during the two-year noncompetition period in an amount equal to one-twenty-fourth of his then current Annual Nike Income. If Mr. Parker is terminated without cause, the parties may mutually agree to waive the covenant not to compete, and if Mr. Parker is terminated for cause, the Company may unilaterally waive the covenant. If the covenant is waived, the Company will not be required to make the payments described above for the months as to which the waiver applies.

The Company had an employment agreement with former President and Chief Executive Officer William D. Perez which required the Company to make a cash payment and vest certain stock options and restricted stock upon termination of employment without cause. Mr. Perez’s employment was terminated without cause on January 20, 2006. Under the terms of this agreement, and certain severance terms approved by the Board of Directors, Mr. Perez received severance payments described on pages 23 and 24. In connection with Mr. Perez’s termination of employment, the Company also purchased his home in Portland, Oregon for his original purchase price of $3,178,258.

The Company has an agreement with President of NIKE Brand Charles D. Denson that extends for two years following the termination of his employment with the Company. The agreement provides that if Mr. Denson’s employment is terminated by the Company at any time, or if he voluntarily resigns after December 31, 2006 but before December 31, 2007, the Company will make monthly payments to him during the two-year noncompetition period in an amount equal to one-twelfth of his then current annual salary and target performance bonus (“Annual Nike Income”). The agreement provides further that if Mr. Denson voluntarily resigns on or prior to December 31, 2006 or on or after December 31, 2007, the Company will make monthly payments to him during the two-year noncompetition period in an amount equal to one-twenty-fourth of his then current Annual Nike Income. If Mr. Denson is terminated without cause, the parties may mutually agree to waive the covenant not to compete, and if Mr. Denson is terminated for cause, the Company may unilaterally waive the covenant. If the covenant is waived, the Company will not be required to make the payments described above for the months as to which the waiver applies.

The Company has an employment agreement and a covenant not to compete with Vice President and Chief Financial Officer Donald W. Blair. The covenant not to compete provides that if Mr. Blair’s employment is terminated by the Company, the Company will make monthly payments to him during the one-year noncompetition period in an amount equal to one-twelfth of his then current annual salary. The

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agreement provides further that if Mr. Blair voluntarily resigns, the Company will make monthly payments to him during the one-year noncompetition period in an amount equal to one-twenty-fourth of his then current annual salary. The Company may waive the covenant. If the covenant is waived, the Company will not be required to make the payments described above for the months as to which the waiver applies. In addition, under Mr. Blair’s initial employment agreement, if his employment is terminated by the Company other than for cause, the Company will pay to him (a) a lump sum equal to his then-current annual base salary and any bonus that would have been earned for the fiscal year in which the termination occurs, and (b) monthly payments of his then-current monthly salary for twelve months, plus any bonus that he would have earned during that time.