COVENANT NOT TO COMPETE
AND NON-DISCLOSURE AGREEMENT
PARTIES:
Thomas E. Clarke (EMPLOYEE)
NIKE, Inc., an Oregon corporation, and its divisions,
subsidiaries and affiliates (NIKE)
DATE: August 31, 1994
RECITALS:
A. This Covenant Not to Compete is executed upon the
EMPLOYEE's advancement to the position of President and nomination to
the Board of Directors of NIKE.
B. Over the course of EMPLOYEE's employment with NIKE,
EMPLOYEE will be or has been exposed to and/or in a position to
generate confidential information including but not limited to
confidential techniques, methods, styles, designs and design concepts,
developments, customer lists, vendor lists, contract factory lists,
pricing information, manufacturing plans, business plans, marketing
plans, sales information, methods of operation, knowledge and data
relating to processes, products, machines, compounds and compositions,
formulae, lasts and molds. It is anticipated that EMPLOYEE will
continue to be exposed to confidential information, will be exposed to
more confidential information and to confidential information of
greater sensitivity as EMPLOYEE advances in the company. This
confidential information is information peculiar to NIKE's business.
The nature of NIKE's business is highly competitive and disclosure of
any confidential information would result in severe damage to NIKE and
be difficult to measure.
C. NIKE makes use of the confidential information
described in paragraph B above throughout the world. This confidential
information of NIKE can be used to NIKE's detriment anywhere in the
world.
D. The provisions of this Covenant Not to Compete and
Non-Disclosure Agreement are a condition of EMPLOYEE's employment
advancement with NIKE.
E. The provisions of this Covenant Not to Compete and
Non-Disclosure Agreement are reasonable.
AGREEMENTS:
1. COVENANT NOT TO COMPETE. During the period of time
EMPLOYEE is employed by NIKE, under the terms of any employment
contract or otherwise, and for one (1) year thereafter, EMPLOYEE will
not directly or indirectly, own, manage, operate, join, control, or
participate in the ownership, management, operation or control of, or
be employed by or connected in any manner with, any business engaged
anywhere in the world in the athletic footwear business, athletic
apparel business, or any other business which directly competes with
NIKE or any of its subsidiaries or affiliated corporations. This
provision is (a) subject to NIKE's option to waive all or any portion
of the one (1) year time period of non-competition following
termination more specifically provided for in paragraph 2; and (b)
subject to NIKE's option to specifically identify, at the time of
termination, those businesses which EMPLOYEE may not be employed by or
connected with for the period of non-competition. NIKE agrees to act
in good faith in its exercise of the above-noted options.
2. ADDITIONAL CONSIDERATION.
a. As additional consideration for the covenant
not to compete described in paragraph 1 above, it is agreed that:
(i) If EMPLOYEE voluntarily leaves the
employ of NIKE, NIKE shall pay EMPLOYEE a monthly payment equal to one-
half (1/2) of EMPLOYEE's last monthly salary for the one (1) year
period after termination of employment, payable on the first day of
each month, or
(ii) If EMPLOYEE is involuntarily
terminated, NIKE shall pay EMPLOYEE a monthly payment equal to
EMPLOYEE's last monthly salary for the one (1) year period after
termination of employment, payable on the first day of each month.
b. NIKE has the option, for whatever reason, to
elect to waive all or a portion of the one (1) year period of non-
competition following termination, by giving EMPLOYEE written notice of
such election not less than 30 (thirty) days prior to the effective
date of the waiver. In that event, NIKE shall not be obligated to pay
EMPLOYEE under this paragraph for any months as to which the covenant
not to compete has been waived.
3. LESSER RESTRICTIONS. Should any of the terms of
paragraphs 1 and 2 above be found unreasonable or invalid by any court
of competent jurisdiction, the parties agree to accept as binding, in
lieu thereof, the maximum terms enforceable by law.
4. EXTENSION OF TIME. The covenant not to compete
described in paragraphs 1, 2 and 3 above shall be extended by a time
period equal to any time consumed in enforcement of the obligations
hereunder during which EMPLOYEE engaged in activities violating the
covenant not to compete.
5. NON-DISCLOSURE AGREEMENT. During the period of
employment by NIKE and forever thereafter, EMPLOYEE will hold in
confidence all information of a confidential nature, including but not
limited to the information described in Recital "B", (all of which
information of a confidential nature shall hereinafter be referred to
as "confidential information") and will not, at any time, directly or
indirectly, use any confidential information for any purpose outside
the scope of EMPLOYEE's employment with NIKE or disclose any
confidential information to any person or organization without the
prior written consent of NIKE. Specifically, but not by way of
limitation, EMPLOYEE shall not ever copy, transmit, reproduce,
summarize, quote, publish or make any commercial or other use
whatsoever of any confidential information without the prior written
consent of NIKE.
6. RETURN OF CONFIDENTIAL INFORMATION. Upon
termination and upon written request by NIKE at any time, EMPLOYEE
shall return to NIKE all documents, records, notebooks and other
similar repositories of or containing confidential information,
including all copies thereof, then in EMPLOYEE's possession, whether
prepared by EMPLOYEE or others, and deliver to NIKE any and all other
confidential information, in whatever form, that may be in EMPLOYEE's
possession or under EMPLOYEE's control.
7. UNAUTHORIZED USE. During the period of employment
with NIKE and thereafter, EMPLOYEE shall notify NIKE immediately of the
unauthorized possession, use or knowledge of any confidential
information by any person employed or not employed by NIKE at the time
of such possession, use or knowledge. EMPLOYEE shall promptly furnish
details of such possession, use or knowledge to NIKE, will assist in
preventing the reoccurrence of such possession, use or knowledge, and
shall cooperate with NIKE in any litigation against third parties
deemed necessary by NIKE to protect the confidential information.
EMPLOYEE's compliance with this paragraph shall not be construed in any
way as a waiver of any of NIKE's rights or remedies against EMPLOYEE
arising out of or related to such unauthorized possession, use or
knowledge.
8. INJUNCTIVE RELIEF. The remedy at law for any
breach of this Covenant Not to Compete and Non-Disclosure Agreement
will be inadequate. It is reasonable to require that EMPLOYEE not
compete with NIKE in order to protect NIKE from unfair use of the
confidential information. NIKE shall be entitled to injunctive relief
in addition to any other remedy it may have. A breach of this Covenant
Not to Compete and Non-Disclosure Agreement during the period of
EMPLOYEE'S employment with NIKE shall be considered a breach of the
terms of that employment and NIKE shall have the right to terminate
EMPLOYEE's employment in addition to any other rights or remedies NIKE
may have.
9. WAIVER, AMENDMENT, MODIFICATION OR CANCELLATION. No
waiver, amendment, modification or cancellation of any term or
condition of this Covenant Not to Compete and Non-Disclosure Agreement
shall be effective unless executed in writing by the party charged
therewith. No written waiver shall excuse the performance of any act
other than the act or acts specifically referred to therein.
10. APPLICABLE LAW/JURISDICTION/VENUE. This Covenant
Not to Compete and Non-Disclosure Agreement, and EMPLOYEE's employment
hereunder, shall be construed according to the laws of the state of
Oregon and EMPLOYEE hereby submits to the jurisdiction of the courts of
the state of Oregon and waives application of any foreign law relating
to this Agreement and EMPLOYEE's employment by NIKE. Any suit or
action of any kind relating to this Agreement or the subject matter
hereof shall be brought in a court located in Washington County,
Oregon.
EMPLOYEE NIKE, Inc.
By: /s/ Thomas E. Clarke By: /s/ Philip H. Knight
__________________________ __________________________
Name: Thomas E. Clarke Name: Philip H. Knight
Covenant Not to Compete and Non-Disclosure Agreement - Nike Inc. and Thomas E. Clarke
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