UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 2006
NIKE, INC.
(Exact Name of Registrant as Specified in Charter)
Oregon 1-10635 93-0584541
____________ ____________ ____________
(State of (Commission (I.R.S.Employer
Incorporation) File Number) Identification No.)
One Bowerman Drive
Beaverton, Oregon 97005-6453
(Address of Principal Executive Offices)
__________________________
(503) 671-6453
(Registrant's telephone number, including area code)
NO CHANGE
______________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
___________________________
Item 1.01 Entry Into A Material Definitive Agreement
In connection with the resignation of William D. Perez as President
and Chief Executive Officer of the Company as described in Item 5.02 below,
the Company and Mr. Perez entered into a resignation letter agreement on
January 20, 2006 pursuant to which they agreed that his resignation would
be treated as a termination by the Company without cause under his
employment agreement with the Company dated November 18, 2004. If
terminated "without cause," Mr. Perez is entitled to receive certain
severance benefits related to salary, bonus, and equity compensation,
whereas upon a voluntary resignation Mr. Perez is not entitled to severance
benefits. The approval by the Board of Directors of the resignation letter
agreement was based on the Board's determination that Mr. Perez would not
have resigned without the agreement.
In accordance with the terms of the employment agreement and the
resignation letter agreement, (a) Mr. Perez will receive a payment of two
years' of his current annual base salary of $1.4 million per year, (b) Mr.
Perez will receive the greater of 100% of his fiscal year 2006 target bonus
of $1,750,000 under the Company's Performance Sharing Plan, or the payout
percentage certified by the Compensation Committee at the end of the fiscal
year, which may be up to 150% of the target bonus, (c) all restrictions
will lapse with respect to the remaining 66,667 shares of a Class B Common
Stock restricted stock bonus of 100,000 shares granted to Mr. Perez on
December 28, 2004 which were to vest over three years from the date of
grant, and (d) Mr. Perez will also vest in full with respect to the
remaining unvested 133,334 shares of his option to purchase 200,000 shares
of Class B Common Stock at an exercise price of $90.85, which was also
granted on December 28, 2004 and scheduled to vest over three years, and he
will have three years to exercise such option.
The Company agreed to provide certain administrative services,
reimburse prepaid club expenses, and pay certain transportation costs,
transition costs, and moving costs which the Company estimates will total
approximately $150,000. In addition, the Company will purchase Mr. Perez's
Portland, Oregon house, and reimburse him for payments incurred to remodel
and furnish the house, in an aggregate amount of approximately $3.6
million.
The Company also agreed to pay to Mr. Perez a cash bonus to be
determined by multiplying $188,667 (representing two-thirds of his targeted
Long-Term Incentive Plan award for fiscal 2006) by the payout factor to be
determined under the terms of that award based on fiscal 2006 performance,
which payout factor may range from 0% to 150%. The Company also agreed
that the restrictions will lapse with respect to one-fourth (or 5,709
shares) of a Class B Common Stock restricted stock bonus of 22,834 shares
granted to Mr. Perez on July 15, 2005, which originally was to vest over
four years. The Company also agreed to accelerate vesting of one-fourth
(or 37,500 shares) of an option to purchase NIKE Class B Common Stock
granted to Mr. Perez on July 15, 2005 at an exercise price of $87.59, and
to extend the time in which he can exercise such option until December 31,
2006.
It is anticipated that Mr. Perez will remain employed with the Company
for a period not to exceed 60 days so that he may consult with the Company
on transition matters. He will be paid a salary not to exceed $10,000 per
month during that period.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Officers
On January 20, 2006, William D. Perez resigned as a director and
President and Chief Executive Officer of the Company. Also on January 20,
2006, the Board of Directors appointed Mark G. Parker as a director and
President and Chief Executive Officer of the Company effective immediately.
Charles D. Denson will become President of the NIKE Brand. The Company
anticipates that Mr. Parker will serve on the Executive Committee of the
Board of Directors.
On January 23, 2006, the Company issued a press release discussing the
above resignation and appointment, a copy of which is furnished herewith as
Exhibit 99.1.
Mr. Parker, 50, has been employed by NIKE since 1979 with primary
responsibilities in product research, design and development, marketing,
and brand management. Mr. Parker was appointed divisional Vice President in
charge of development in 1987, corporate Vice President in 1989, General
Manager in 1993, Vice President of Global Footwear in 1998, and President
of the NIKE Brand in 2001.
The Company's Compensation Committee has not yet considered what
adjustments will be made to Mr. Parker's compensation in connection with
his promotion to President and Chief Executive Officer. A previous
agreement dated December 28, 2004 between Mr. Parker and the Company
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 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. Parker voluntarily resigns prior to
December 31, 2006 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.
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 Compensation Committee has
also not yet considered whether the foregoing agreement should be modified.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
10.1 Resignation Letter Agreement between William D. Perez and the
Company
99.1 Press Release dated January 23, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NIKE, Inc.
(Registrant)
Date: January 23, 2006
/s/ Donald W. Blair
__________________________
By: Donald W. Blair
Chief Financial Officer