Nike (NKE)

Transition Rules Under Section 409A of the Internal Revenue Code

The following modifications to the terms of the Plan were in effect during the period between December 31, 2004 and January 1, 2009 as permitted by the transition rules under Section 409A of the Code set forth below.

(1) Deferral Elections for 2005 Plan Year:

On or before March 15, 2005, a Participant could elect to defer Compensation for services performed during the 2005 Plan Year, provided that the amounts to which the deferral election relates had not been paid or made available at the time of the election. For the 2005 Plan Year only, a Participant could irrevocably elect at any time during the 2005 Plan Year to reduce the percentage to be deferred from Salary, Incentive Payments, and Fees earned in the remainder of the 2005 Plan Year to zero.

The transition rules relied upon were Q&A 20 and 21 of IRS Notice 2005-1.

(2) Change in Form of Payment During 2005 Plan Year:

During the 2005 Plan Year only, a Participant was permitted to change his or her form of payment election, provided that his or her change was filed with the Administrator at least one year prior to his or her Payment Commencement Date. A Participant was not required to postpone the affected distribution for five years from the original payment date.

The transition rule relied upon was Q&A 19(c) of IRS Notice 2005-1.

(3) Change in Scheduled Withdrawal Date During 2005 Plan Year:

During the 2005 Plan Year only, a Participant was permitted, at least one year prior to a Scheduled Withdrawal Date, to revoke his or her Scheduled Withdrawal election in favor of a later Scheduled Withdrawal Date. The five-year minimum postponement period did not apply to postponement elections made on or before December 31, 2005.

The transition rule relied upon was Q&A 19(c) of IRS Notice 2005-1.

(4) November 2006 Deferral Elections for Long Term Incentive Payments:

If a Participant made an election during the Annual Election Period in November 2005 to defer Long Term Incentive Payments anticipated to be made in August 2007, the Participant was permitted during the Annual Election Period in November 2006 to make an election to defer an additional amount of the Long Term Incentive Payment for August 2007. However, a Participant was not permitted to decrease or cancel his or her prior deferral election with respect to Long Term Incentive Payments, except as provided in the case of an unforeseeable financial emergency.

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Also, during the Annual Election Period in November 2006, a Participant was permitted to change his or her form of payment election for the Long Term Incentive Payments that were subject to a deferral election made in November 2005 (and that were credited to the Participant’s Account in August 2007).

The transition rule relied upon was Section 3.02 of IRS Notice 2006-79.

(5) November 2007 Deferral Elections for Long Term Incentive Payments:

During the November 2007 Annual Election Period, a Participant was permitted to make a deferral election for the following Long Term Incentive Payments:

The transition rule relied upon was Section 3.02 of IRS Notice 2006-79.

In addition, at the November 2007 Annual Election Period, a Participant was permitted to make a deferral election with respect to Long Term Incentive Payments for the performance period ending May 31, 2011, under the general timing rule for deferral elections under Treas. Reg. § 1.409A-2(a)(3) and as provided under the terms of the Plan. A Participant who elected a Scheduled Withdrawal for Compensation deferred during the November 2007 Annual Election Period was required to specify the same withdrawal year for any deferred Long Term Incentive Payment for the performance period ending in 2008 as the Participant specified for Salary and Bonus paid in 2008, but was permitted to select different withdrawal years for any deferred Long Term Incentive Payments for the performance periods ending in 2009, 2010 and 2011.

(6) November 2007 Deferral Elections for Bonus:

During the November 2007 Annual Election Period, a Participant was permitted to make a deferral election for Bonus attributable to the fiscal year ending May 31, 2008 without satisfying all conditions under the terms of the Plan otherwise required for such deferral election.

The transition rule relied upon was Section 3.02 of IRS Notice 2006-79.

(7) November 2007 Payment Elections for Profit Sharing Make Up Contributions Contributed in 2008:

During the November 2007 Annual Election Period, a Participant was permitted to designate a form of payment for the Profit Sharing Make Up Contribution (as adjusted for Investment Returns pursuant to Section 4.1(d)) that was contributed to his or her Account in August 2008 (attributable to the 401(k) Profit Sharing Plan plan year ended May 31, 2008), without regard to the deferral timing rules under Code Section 409A.

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The transition rule relied upon was Section 3.02 of IRS Notice 2006-79.

(8) Change of Control during 2008 Plan Year:

The following modifications to Section 6.5 of the Plan applied to any Change of Control that occurred during the 2008 Plan Year.

With respect to any Change of Control that occurs during the 2008 Plan Year, each Participant to whom such Change of Control applies (or, after his or her death, his or her Beneficiary) shall be paid his or her full Account balance in a single cash lump sum in January 2009.

Notwithstanding anything to the contrary in this Plan, if a Change of Control occurs with respect to the Company during the 2008 Plan Year, then payment of the full Account balance shall be commenced to each Participant (or, after his or her death, to his or her Beneficiary) within 30 days after the date of such Change of Control and such amount shall be paid in such form as elected by the Participant with respect to a distribution by reason of the Participant’s Retirement or, if no such election has been filed, in a lump sum.

Notwithstanding anything to the contrary in this Plan, if both (1) a Change of Control occurs with respect to a Participating Employer during the 2008 Plan Year and (2) a Participant employed by that Participating Employer has a Separation from Service in the 2008 Plan Year after such Change of Control, then any resulting payment(s) that would have been made to the Participant (or, after his or her death, to his or her Beneficiary) in the 2008 Plan Year had such Change of Control not occurred shall be made in the 2008 Plan Year and the remaining Account balance shall be paid to the Participant (or, after his or her death, to his or her Beneficiary) in January 2009.

The transition rule relied upon was Section 3.02 of IRS Notice 2007-86.

(9) October/November 2008 Deferral Elections for Bonus:

During the October/November 2008 Annual Election Period, a Participant may make a deferral election for Bonus attributable to the fiscal year ending May 31, 2009. In addition, if a Participant who elected to defer Bonus during the November 2007 Annual Election Period does not submit a deferral election during the October/November 2008 Annual Election Period, the deferral election with respect to Bonus continued during the October/November 2008 Annual Election Period shall apply to Bonus attributable to the fiscal year ending May 31, 2009 (as well as to Bonus attributable to the fiscal year ending May 31, 2010 as described in Section 3.1(c)(3)).

The transition rule to be relied upon is Section 3.02 of IRS Notice 2007-86.

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(10) October/November 2008 Change in Form of Payment for Profit Sharing Make Up Contributions and Discretionary Contributions:

During the October/November 2008 Annual Election Period, a Participant will be permitted to change the form of payment elections applicable to all Profit Sharing Make Up Contributions and Discretionary Contributions contributed to his or her Account during calendar years 2005 through 2008 (as adjusted for Investment Returns pursuant to Section 4.1(d)). Also during the October/November 2008 Annual Election Period, the form of payment election made or continued by a Participant as described in Section 6.1(b)(2) shall apply to all Profit Sharing Make Up Contributions and Discretionary Contributions contributed to his or her Account during calendar years 2009 and 2010 (as adjusted for Investment Returns pursuant to Section 4.1(d)). For any Participant who does not make or continue a form of payment election as described in Section 6.1(b)(2) during the October/November 2008 Annual Election Period, the form of payment for all Profit Sharing Make Up Contributions and Discretionary Contributions contributed to his or her Account during calendar years 2009 and 2010 (as adjusted for Investment Returns pursuant to Section 4.1(d)) shall be quarterly installments over 10 years beginning on the Participant’s Payment Commencement Date.

The transition rule to be relied upon is Section 3.02 of IRS Notice 2007-86.

During the October/November 2008 Annual Election Period, a Participant who received his or her first grant of a right to a Long Term Incentive Payment on or after November 1, 2007 and before October 23, 2008, and who did not have an opportunity to defer Long Term Incentive Payments during the November 2007 Annual Election Period, may make a deferral election for the following Long Term Incentive Payments:

The transition rule to be relied upon was Section 3.02 of IRS Notice 2007-86.

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Transition Rules Under Section 409A of the Internal Revenue Code

Nike has elected to use the following transition rules to comply with Section 409A of the Internal Revenue Code of 1986, as amended.

(1) Deferral Elections for 2005 Plan Year:

On or before March 15, 2005, a Participant could elect to defer Compensation for services performed during the 2005 Plan Year, provided that the amounts to which the deferral election relates had not been paid or made available at the time of the election. For the 2005 Plan Year only, a Participant could irrevocably elect at any time during the 2005 Plan Year to reduce the percentage to be deferred from Salary, Incentive Payments, and Fees earned in the remainder of the 2005 Plan Year to zero.

The transition rules relied upon were Q&A 20 and 21 of IRS Notice 2005-1.

(2) Change in Form of Payment During 2005 Plan Year:

During the 2005 Plan Year only, a Participant was permitted to change his or her form of distribution, provided that his or her change was filed with the Retirement Committee at least one year prior to his or her Payment Commencement Date. A Participant was not required to postpone the affected distribution for five years from the original payment date.

The transition rule relied upon was Q&A 19(c) of IRS Notice 2005-1.

(3) Change in Scheduled Withdrawal Date During 2005 Plan Year:

During the 2005 Plan Year, a Participant was permitted, at least one year prior to a Scheduled Withdrawal date, to revoke his or her Scheduled Withdrawal election in favor of a later Scheduled Withdrawal date. The five-year minimum postponement period did not apply to postponement elections made on or before December 31, 2005.

The transition rule relied upon was Q&A 19(c) of IRS Notice 2005-1.

(4) November 2006 Deferral Elections for Long Term Incentive Payments:

If a Participant made an election during the Annual Election Period in November 2005 to defer Long Term Incentive Payments anticipated to be made in August 2007, the Participant was permitted during the Annual Election Period in November 2006 to make an election to defer an additional amount of the Long Term Incentive Payment for August 2007. However, a

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Participant was not permitted to decrease or cancel his or her prior deferral election with respect to Long Term Incentive Payments, except as provided in the case of an unforeseeable financial emergency.

Also, during the Annual Election Period in November 2006, a Participant was permitted to change the time and/or form of distribution for the Long Term Incentive Payments that were subject to a deferral election made in November 2005 (and that were credited to the Participant’s Account in August 2007). This election applied only to amounts that would not otherwise be payable in 2006 and could not cause an amount to be paid in 2006 that would not otherwise be payable in 2006.

The transition rule relied upon was Section 3.02 of IRS Notice 2006-79.

(5) November 2007 Deferral Elections for Long Term Incentive Payments:

During the November 2007 Annual Election Period, a Participant may make a deferral election for the following Long Term Incentive Payments (as defined in Section 1.2(z) of the Plan):

The transition rules relied upon are Q&A 22 of IRS Notice 2005-1 and Section 3.02 of IRS Notice 2006-79.

In addition, at the November 2007 Annual Election Period, a Participant may make a deferral election with respect to Long Term Incentive Payments for the performance period beginning June 1, 2008 and ending May 31, 2011, under the general timing rule for deferral elections under Treas. Reg. § 1.409A-2(a)(3).

(6) November 2007 Deferral Elections for Performance Sharing Plan (“PSP”) payments:

During the November 2007 Annual Election Period, a Participant may make a deferral election for bonus attributable to the PSP period beginning June 1, 2007 and ending May 31, 2008.

The transition rule relied upon is Section 3.02 of IRS Notice 2006-79.

(7) November 2007 Payment Elections for Restoration Amounts Contributed in 2008:

During the November 2007 Annual Election Period, a Participant may designate a time and form of payment of the Restoration Amount (if any) that will be contributed to his or her Account in August 2008 (attributable to the Profit Sharing Plan plan year ended May 31, 2008), without regard to the deferral timing rules under Code Section 409A.

The transition rule relied upon is Section 3.02 of IRS Notice 2006-79.

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