Nike (NKE)

Restricted Stock Awards

The third component in our long-term portfolio mix is restricted stock awards. Stock ownership and stock-based incentive awards align the interests of our Named Executive Officers with the interests of our shareholders, as the value of this incentive rises and falls with the stock price, consistent with shareholder returns. Historically, the Committee has generally awarded restricted stock to Named Executive Officers once every three years. However, the Committee has decided to grant restricted stock annually to Mr. Parker and Mr. Denson to provide a relatively greater alignment between their compensation and shareholder returns, and to enhance retention incentives. In addition, the Committee may also award restricted stock in connection with promotions or other special circumstances. Restricted stock awards are generally made in July at the same meeting at which stock options are granted. Awards generally vest in three equal installments on each of the first three anniversaries of the grant date. The awards promote executive retention as unvested shares held at the time the executive’s employment is terminated are forfeited. Award recipients receive dividends on the full number of restricted shares awarded, both vested and unvested.

Mr. Parker and Mr. Denson were the only Named Executive Officers that received restricted stock awards in fiscal 2009. In July 2008, Mr. Parker received an award covering 38,660 shares of our Class B Stock valued at $2,250,000 based on the closing price of our Class B Stock on the grant date and Mr. Denson received an award covering 25,774 shares of our Class B Stock valued at $1,500,000. By

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comparison, in July 2007, Mr. Parker received an award covering 25,633 shares of our Class B Stock valued at $1,500,000 based on the closing price on the grant date, and Mr. Denson received an award covering 17,089 shares valued at $1,000,000. The Committee increased the restricted stock award levels for Mr. Parker and Mr. Denson based on several factors, including but not limited to what the Committee believed to be a desirable mix of long-term compensation, and the Committee’s judgment of competitive grants by our peer group of companies. Our human resources staff periodically tests the reasonableness of our restricted stock awards against peer group market data. Mr. Blair, Mr. DeStefano and Mr. Edwards did not receive restricted stock awards in fiscal 2009. They received awards in fiscal 2007 consistent with the practice noted above of granting awards once every three years.

Restricted Stock Awards

The third component in our long-term portfolio mix is restricted stock awards. Stock ownership and stock-based incentive awards align the interests of our Named Executive Officers with the interests of our shareholders, as the value of this incentive rises and falls with the stock price, consistent with shareholder

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returns. Historically, the Committee has generally awarded restricted stock to Named Executive Officers once every three years. However, the Committee has decided to grant restricted stock annually to Mr. Parker and Mr. Denson to provide a relatively greater alignment between their compensation and shareholder returns, and to enhance retention incentives. In addition, the Committee may also award restricted stock in connection with promotions or other special circumstances. Restricted stock awards are generally made in July at the same meeting at which stock options are granted. Awards generally vest in three equal installments on each of the first three anniversaries of the grant date. The awards promote executive retention as unvested shares held at the time the executive’s employment is terminated are forfeited. Award recipients receive dividends on the full number of restricted shares awarded, both vested and unvested.

Mr. Parker and Mr. Denson were the only Named Executive Officers that received restricted stock awards in fiscal 2008. In July 2007, Mr. Parker received an award covering 25,633 shares of our Class B Stock valued at $1,500,000 based on the closing price of our Class B Stock on the grant date and Mr. Denson received an award covering 17,089 shares of our Class B Stock valued at $1,000,000. Mr. Blair, Mr. DeStefano and Mr. Edwards did not receive restricted stock awards in fiscal 2008, because they received awards in fiscal 2007. The Committee set the restricted stock award levels for Mr. Parker and Mr. Denson based on succession planning retention strategies, what the Committee believed to be a desirable mix of long-term compensation, and the Committee’s judgment of what it found to be competitive with our peer group of companies and our competitors. Our human resources staff periodically tests the reasonableness of our restricted stock awards against peer group market data.

Restricted Stock Awards

The third component in our long-term portfolio mix is restricted stock awards. Stock ownership and stock-based incentive awards align the interests of our Named Executive Officers with the interests of our shareholders. Restricted stock provides both upside and downside potential returns, since the value of this incentive rises and falls with the stock price, consistent with shareholder returns. The Committee generally awards restricted stock to a Named Executive Officer once every three years, except that the Committee has determined that restricted stock should be granted annually to Mr. Parker and Mr. Denson to provide a relatively greater alignment between their compensation and shareholder returns. However, the Committee may also award restricted stock in connection with promotions or other special circumstances. Restricted stock awards on the regular three-year cycle are generally made in July at the same meeting at which stock options are granted. Awards generally vest in three equal installments on each of the first three anniversaries of the grant date. The awards promote executive retention as unvested shares held at the time the executive’s employment is terminated are forfeited. Award recipients receive dividends on the full number of restricted shares awarded, both vested and unvested.

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Mr. Parker and Mr. Denson did not receive restricted stock awards in fiscal 2007. However, Mr. Parker received an award covering 23,734 shares of our Class B Stock on February 16, 2006 in connection with his promotion to President and Chief Executive Officer, and an award covering 30,000 shares of our Class B Stock on July 15, 2005. In addition, Mr. Denson received an award covering 11,868 shares of our Class B Stock on February 16, 2006 in connection with his promotion to sole President of the NIKE Brand, and an award covering 30,000 shares of our Class B Stock on July 15, 2005. In fiscal 2007, restricted stock awards were made as part of the standard three-year award cycle covering 25,394 shares to each of Mr. Blair and Mr. DeStefano, and 19,046 shares to Mr. Stewart. These awards had a value based on the closing price of our Class B Stock on the grant date of $1,000,000 for Mr. Blair and Mr. DeStefano, and $750,000 for Mr. Stewart. The Committee set these restricted stock award levels based on the desired mix of long-term compensation and its judgment of what it finds to be competitive with our peer group of companies and our competitors, while maintaining internal pay equity. Our human resources staff periodically tests the reasonableness of our restricted stock awards against peer group market data.