NIKE, Inc. Memo #1 by Collin Myers

Memorandum #1

Collin J. Myers BUS-458 Spring 2013

Collin J. Myers

NIKE Memorandum #1 The story of NIKE starts with two men: Bill Bowerman & Phil Knight. Bowerman was a nationally respected track and field coach at the University of Oregon.1 Knight was a talented middle-distance runner from Portland, who enrolled at Oregon in the fall of 1955 and competed for Bowermanâ&#x20AC;&#x2122;s track program. Bowerman was known for seeking new ways to give his athletes a competitive advantage. He experimented with different track surfaces, hydration drinks and innovation in running shoes.2 After completing his MBA at Stanford, Knight began to analyze the idea of manufacturing running shoes in Japan that could compete with more established German brands. Knight was not capable of convincing Japanese manufactures of this but Tiger running shoes did offer him a position as a distributor in the United States. When the first set of sample shoes arrived, Knight sent several pairs to Bowerman, hoping to make a sale.3 Instead, Bowerman stunned Knight by offering to become his partner. In January 1964, they shook hands to form Blue Ribbon Sports (BRS). BRS placed its first order of 300 pairs of shoes soon after. Knight would sell shoes out of his trunk while Bowerman ripped apart Tiger shoes to see how he could make them lighter and better.4 Experimenting with a waffle Iron, Bowerman created an outsole that was far superior to the rest. The prototypes Bowerman created were then tested by the University of Oregon track team.5 In essence, the foundation for what would become

http://nikeinc.com/pages/history-heritage http://nikeinc.com/pages/history-heritage 3 http://nikeinc.com/pages/history-heritage 4 http://nikeinc.com/pages/history-heritage 5 http://nikeinc.com/pages/history-heritage 2

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NIKE had been established. Knight and Bowerman realized that the growth of NIKE would be driven by innovation.6 Today, NIKE, Inc. is the world’s leading designer, marketer and distributer of athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. NIKE, Inc. sells, distributes and licensees its products in approximately 200 countries around the world. NIKE focuses its products in seven key categories: Running, Basketball, Football (Soccer), Men’s Training, Women’s Training, NIKE Sportswear and Action Sports. NIKE sells products through its NIKE Brand and Affiliate Brands (Converse Inc., Hurley International LLC, Jordan Brand and Nike Golf). Operating segments for the NIKE Brand are: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets.7 NIKE’s core competencies include: Heritage, Innovation, and Marketing. NIKE has built one of the most recognizable brands in the world through its constant innovation strategy, applied not only to their products but also to all areas of business. Without Innovation, NIKE would not be what it is today, making innovation NIKEs greatest source of competitive advantage.8 The NIKE swoosh and ‘Just do it’ tagline represent much more than a sportswear company. NIKE’s history and image have evolved positively over the years, allowing many generations of consumers exposure to their products. NIKE’s marketing success over time evolved into a core competency. The way NIKE markets its products to consumers through advertising and athlete representation is unique only to NIKE, their third source of competitive advantage.9

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NIKE’s Board of Directors is led by Philip H. Knight, the co-founder and past President of NIKE. NIKE’s President and CEO is Mark G. Parker who has been employed by NIKE since 1979. The Board is composed of 12 members, 10 of whom are considered independent, non-executive directors under the listing standards of the New York Stock Exchange10, ten males and two female members, all of which are American citizens. NIKE’s Board Members consist of highly affluent businessmen that have backgrounds in: Law, Broadcasting, Olympic Basketball Coaching and Medicine. The Board Members offer NIKE specific capabilities in functional areas such as: Law, Human Resources, Manufacturing, Distribution, Finance, Marketing, Management, and Industry Analysis. The broad skill set of NIKE’s Board Members allow them to draw knowledge from all aspects of the global business environment. NIKE’s Board of Directors and their credentials can be found in [Fig. 1].11 The Board is divided into a committee structure to help smooth Governance across all business segments [Fig. 2].12 The Guidelines cover areas concerned with: The Board13, Board Meetings14, Committee Matters15, and Management Review and Succession.16 CEO compensation is determined by the Compensation Committee.17 The Committee consists of board members who are in charge of the following: discharge the Board’s responsibilities relating to compensation of the Company’s executive officers and directors; oversee the administration of the Company’s executive

http://nike.q4web.com/Investors/Corporate-Governance/Board-of-Directors/default.aspx http://nike.q4web.com/Investors/Corporate-Governance/Board-of-Directors/default.aspx 12 http://nike.q4web.com/Investors/Corporate-Governance/Board-Committee-Assignments/default.aspx 13 http://nike.q4web.com/Investors/Corporate-Governance/Board-Committee-Assignments/default.aspx 14 http://nike.q4web.com/Investors/Corporate-Governance/Board-Committee-Assignments/default.aspx 15 http://nike.q4web.com/Investors/Corporate-Governance/Board-Committee-Assignments/default.aspx 16 http://nike.q4web.com/Investors/Corporate-Governance/Guidelines/default.aspx#meetings 17 http://nike.q4web.com/Investors/Corporate-Governance/Board-Committee-Charters/CompensationCommittee/default.aspx 11

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compensation plans; and oversee the performance evaluation of the Chief Executive Officer (“CEO”) and other executive officers.18 In 2011, NIKE launched an executivelevel Committee for Sustainable Innovation.19 This group is chaired by Mark Parker and oversees NIKEs innovation pipeline and portfolio [Fig. 3].20NIKE’s innovation pipeline lays out the basis of their innovation strategy. This Committee helps to fully capitalize on opportunities by accelerating adoption and bringing these activities to scale.21 NIKEs executive team is quite vast with over 50 positions due to the amount of different markets and regions NIKE has in their portfolio. NIKE has what they call ‘NIKE’s Global Senior Team’, whom are individuals that lead NIKE business and growth strategies.22 The positions and executives included in the Global Senior Team can be seen in [Fig 4].23 Mark G. Parker the President and CEO of NIKE plays an important role of this process. Parker’s constant drive to innovate and discipline shown during our global recession proves that Parker is a 10x leader. Despite the evident increases in global production costs Parker continues to seek new ways to innovate NIKEs operations from the thread up. NIKE’s organizational structure reflects a collaborative environment, or a ‘matrix organization’.24 In a matrix organization, team members report to two areas, product manager (Geography) as well as the department manager (Global Function) [Fig. 5].25 At NIKE, teams work across footwear, apparel and equipment product engines which 18 19

http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 21 http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 22 http://investors.nikeinc.com/Investors/Corporate-Governance/NIKE-Inc-Management/default.aspx 23 http://nike.q4web.com/Investors/Corporate-Governance/NIKE-Inc-Management/default.aspx 24 Nike's Flat Organizational Structure | eHow.com http://www.ehow.com/facts_6887850_nike_s-flatorganizational-structure.html#ixzz2K0HbaH95 25 http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 20

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represent NIKEs core consumer categories.26 NIKE, Inc. affiliate brands (Hurley & Jordan) operate in a similarly collaborative way, adopting the structure of a matrix organization. Production teams can make decisions and react much quicker than the department head, who is often removed from the production line. As of May 31, 2012, NIKE had approximately 44,000 employees worldwide, including retail and part-time employees.27 NIKEâ&#x20AC;&#x2122;s vision is to build a sustainable business and create value for NIKE and its stakeholders by decoupling profitable growth from constrained resources.28 NIKE believes that sustainability requires transformation, and innovation lies at the heart of that process. Nike strives to innovate for three main purposes: to serve the athlete, to grow the company, and to inspire the world.29 Nike drives innovation throughout the company across four strategic pillars: Materials, Sourcing & Manufacturing, Market Transformation and Digital Services [Fig. 6].30 These four pillars are the foundation of how NIKE implements their innovation strategy. Innovation at NIKE is about leveraging new ideas, expanding into new spaces, driving through new channels and divesting to invest. As a result in 2012, NIKE reached agreements to sell two of its affiliate brands: Umbro and Cole Haan.31 This will allow NIKE to focus on the highest-potential opportunities to drive sustainable, profitable growth for shareholders.32 The intense competition and rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic 26

http://investors.nikeinc.com/Investors/Corporate-Governance/NIKE-Inc-Management/default.aspx http://investors.nikeinc.com/files/doc_financials/AnnualReports/2012/docs/nike-2012-form-10K.pdf 28 http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 29 http://www.nikeresponsibility.com/report/content/chapter/business-overview 30 http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 31 http://nikeinc.com/news/nike-inc-to-divest-of-cole-haan-and-umbro-to-focus-on-accelerating-growththrough-nike-and-complementary-sport-brands 32 NIKE FY2012 Annual Report, â&#x20AC;&#x153;Mark Parker Letterâ&#x20AC;? 27

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equipment, constitute significant risk factors in NIKE’s operations. NIKE’s strategy is to achieve long-term revenue growth by creating innovative “must have” products (NIKE Flyknit Technology), building deep personal consumer connections with our brands, and delivering compelling consumer experiences at retail and online (DTC Businesses).33 As a result, NIKE has created what they call their Category Offense to ensure customer demand is met. NIKE’s category teams live the lives of athletes in each sport of their portfolio, mining for insights that help innovate new ways to improve performance and experience. NIKE has also made a significant investment into the development of their Direct to Consumer Business’ (DTC), growing 23% from 2.8 billion to 3.5 billion in fiscal year 2012 alone.34 DTC Business’ represent the stores and websites NIKE operates which is part of their Digital Services pillar of sustainability.35 The global economic recession resulted in a significant slow-down in international trade and a sharp rise in protectionist views around the world.36 These trends are affecting many global manufacturing and service sectors, including the footwear and apparel industries. Companies in NIKEs industry are facing trade challenges in many different regions. NIKE is working together with competitors to address trade issues to reduce the impact to the industry, while observing applicable competition laws.37 These efforts could result in increases in Selling, General & Administrative expenses which are the costs associated with bringing a product to

NIKE FY 2013 Q2 Earnings Summary NIKE FY2012 Annual Report, “Mark Parker Letter” 35 http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy 36 http://investors.nikeinc.com/files/doc_financials/AnnualReports/2012/docs/nike-2012-form-10K.pdf 37 http://investors.nikeinc.com/files/doc_financials/AnnualReports/2012/docs/nike-2012-form-10K.pdf 34

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market. An increase in SG&A expenses could affect NIKE’s sales or profitability and the imported footwear and apparel industry as a whole.38 China represents an important sourcing country and consumer marketing country for NIKE. Many governments around the world are concerned about China’s fast paced economy, compliance with WTO rules, high trade surpluses, and currency valuation. NIKE’s primary foreign currency exposures arise from transactions made of nonfunctional currencies and the translation of foreign currency denominated results of operations, financial position and cash flows (Euro and Chinese Renminbi, into US Dollars).39NIKE is working with broad coalitions of global businesses and trade associations representing a wide variety of sectors (Services, Manufacturing, and Agriculture) to help ensure any legislation enacted and implemented.40 Despite the ongoing challenges in the economy, NIKE delivered record revenue in fiscal 2012, outperforming the past five fiscal years [Fig. 7].41 NIKE revenues grew 16% to $24.1 billion and net income increased 4% to $2.2 billion in fiscal 2012 [Fig. 8].42 Over the past four fiscal years, NIKE, Inc. has delivered a positive return on net income despite being subject to ever changing tax and currency rates [Fig. 9].43 NIKE Brand footwear continues to be the cornerstone of revenues, alone generating 60% of revenues at $13.4 billion [Fig. 10].44 In fiscal 2012, NIKE revenues were increased across all operating segments [Fig. 11].45 North America contributed

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approximately 7 percentage points ($8.8B) [Fig. 12]46, while the Emerging Markets and Greater China geographies contributed 4 ($3.4B) and 2 ($2.5B) percentage points to the NIKE Brand revenue growth [Fig. 13 & 14].47 Nike looks to sustain their North American position by focusing on brand, distribution and product strength. In fiscal 2012, sales in the United States including U.S. sales of other businesses accounted for approximately 42% of total revenues, compared to 43% in fiscal 2011 and 42% in fiscal 2010.48 Nike looks to continue and refine growth in Chinese markets. China offers Nike a $2.5 billion geography with which they already hold a strong customer base and reputation. Nike seeks to continue growth in the emerging markets. In fact, 2013 Q2 was the first $1B revenue quarter for Nikes emerging market businesses.49 In fiscal 2012, non-U.S. sales (including non-U.S. sales of other businesses) accounted for 58% of total revenues, compared to 57% in fiscal 2011 and 58% in fiscal 2010.50 As a global leader in sportswear, NIKE is no stranger to the increasingly complex and volatile environment of the global economy experienced in recent years. NIKE products are all subject to the risks associated with overseas sourcing, manufacturing, and financing (virtually all NIKE footwear and apparel products are produced outside the United States). The decline of global capital and credit market conditions threaten NIKEâ&#x20AC;&#x2122;s business, operating results, and financial condition. The global economic status will play an intricate role in the success of NIKE and its competitors. All major companies striving for long term growth are subject to multiple external factors. Traditional methods of manufacturing and distribution need to evolve to offset 46

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environmental concerns and energy costs. Ongoing globalization, transparency and access to information will increase the demand for equal access to economic opportunity. Emerging regulations related to materials use, labor practices and other issues continue to shape the industryâ&#x20AC;&#x2122;s business environment.51 NIKE must continue to use their leadership position to help mitigate the impact of macroeconomic forces on profitability. NIKE can do this by focusing on the core competencies and continuing to deliver their customers the most innovative products.

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References http://nikeinc.com/pages/history-‐heritage http://www.nikeresponsibility.com/report/content/chapter/our-‐sustainability-‐strategy NIKE FY 2013 Q2 Earnings Summary ttp://investors.nikeinc.com/files/doc_financials/AnnualReports/2012/docs/nike-‐2012-‐form-‐10K.pdf http://data.cnbc.com/quotes/NKE/tab/7.2 http://nikeinc.com/news/nike-‐inc-‐to-‐divest-‐of-‐cole-‐haan-‐and-‐umbro-‐to-‐focus-‐on-‐accelerating-‐growth-‐ through-‐nike-‐and-‐complementary-‐sport-‐brands NIKE FY2012 Annual Report, “Mark Parker Letter” NIKE FY 2013 Q2 Earnings Summary http://www.nikeresponsibility.com/report/content/chapter/our-‐sustainability-‐strategy Nike's Flat Organizational Structure | eHow.com http://www.ehow.com/facts_6887850_nike_s-‐flat-‐ organizational-‐structure.html#ixzz2K0HbaH95 http://www.nikeresponsibility.com/report/content/chapter/business-‐overview http://www.nikeresponsibility.com/report/content/chapter/our-‐sustainability-‐strategy http://investors.nikeinc.com/Investors/Corporate-‐Governance/NIKE-‐Inc-‐Management/default.aspx http://nike.q4web.com/Investors/Corporate-‐Governance/NIKE-‐Inc-‐Management/default.aspx Nike's Flat Organizational Structure | eHow.com http://www.ehow.com/facts_6887850_nike_s-‐flat-‐ organizational-‐structure.html#ixzz2K0HbaH95 http://nike.q4web.com/Investors/Corporate-‐Governance/Board-‐Committee-‐Assignments/default.aspx http://nike.q4web.com/Investors/Corporate-‐Governance/Guidelines/default.aspx#meetings http://nike.q4web.com/Investors/Corporate-‐Governance/Board-‐Committee-‐Charters/Compensation-‐ Committee/default.aspx

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Figure 1

Philip H. Knight

Mr. Knight, 74, a director since 1968, is Chairman of the Board of Directors of NIKE. Mr. Knight is a co-founder of the Company and, except for the period from June 1983 through September 1984, served as its President from 1968 to 1990, and from June 2000 to 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State University. Mr. Knight led NIKE from a small partnership founded on a handshake to the world’s largest footwear, apparel, and equipment company.

Mark G. Parker

Mr. Parker, 56, has been President and Chief Executive Officer and a director since 2006. He 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. In addition to helping lead the continued growth of the Nike brand, Parker is responsible for the growth of NIKE, Inc.'s global business portfolio, which includes Converse Inc.,and Hurley International LLC.

Elizabeth J. Comstock

Ms. Comstock, 51, appointed a director on April 21, 2011, is Senior Vice President and Chief Marketing Officer of General Electric Company (“GE”). At GE, she was appointed Vice President, Communications, NBC News Communications in 1994, Senior Vice President, NBC Corporate Communications in 1996, Vice President of Corporate Communications in 1998, Corporate Vice President and Chief Marketing Officer in 2003, President, NBC Universal Integrated Media in 2006, and Senior Vice President and Chief Marketing Officer in 2008. Prior to joining GE in 1994, Ms. Comstock held a succession of publicity

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and promotions positions at GE, NBC, CBS, and Turner Broadcasting. She began her career in local television production in Virginia. Ms. Comstock is a trustee of the Smithsonian’s Cooper-Hewitt National Design Museum.

John C. Connors

Director since 2005, partner in Ignition Partners LLC, a Seattlearea venture capital firm. 1999-2205 served as SVP and CFO of Microsoft Corp. Mr. Connors is a member of the Board of Trustees — Swedish Medical Center, and is currently a member of the Board of Directors of Scout Analytics Inc., FiREapps, Inc., DataSphere Technologies, Inc., Splunk, Inc., Tier 3, Inc., Korrio, Inc., the Washington Policy Center, and the University of Washington Tyee Club.

Timothy D. Cook

Mr. Cook, 51, a director since 2005, is the Chief Executive Officer of Apple, Inc. Mr. Cook joined Apple in March 1998 as Senior Vice President of Worldwide Operations and also served as Executive Vice President, Worldwide Sales and Operations and its Chief Operating Officer until he was named the CEO of Apple, Inc. in August 2011. Mr. Cook was Vice President, Corporate Materials for Compaq Computer Corporation from 1997 to 1998. Previous to his work at Compaq, Mr. Cook served in the positions of Senior Vice President Fulfillment and Chief Operating Officer of the Reseller Division at Intelligent Electronics from 1994 to 1997. Mr. Cook also worked for International Business Machines Corporation from 1983 to 1994, most recently as Director of North American Fulfillment. Mr. Cook is currently a member of the Board of Directors of the National Football Foundation and Apple, Inc.

Alan B. Graf

Mr. Graf, 58, a director since 2002, is the Executive Vice President and Chief Financial Officer of FedEx Corporation, a position he has held since 1998, and is a member of FedEx Corporation’s Executive Committee. Mr. Graf joined FedEx Corporation in 1980 and was Senior Vice President and Chief Financial Officer for FedEx Express, FedEx’s predecessor, from 1991 to 1998. He previously served on the boards of directors of Kimball International Inc., Storage USA, Inc. and Arkwright

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Mutual Insurance Co., and he is currently a director of MidAmerica Apartment Communities, Inc..

Douglas G. Houser

Mr. Houser, 77, a director since 1970, has been a partner in the Portland, Oregon law firm of Bullivant, Houser, Bailey since 1965 and is presently Senior Counsel. Mr. Houser is a trustee of Willamette University and a Fellow in the American College of Trial Lawyers, and has served as a member of the Board of Governors and Treasurer of the Oregon State Bar Association and as a Director of the Rand Corporation, Institute for Civil Justice Board of Overseers, and the National Judicial College Foundation Board.

John C. Lechleiter Dr. Lechleiter, 58, a director since 2009, is Chairman of the Board, President, and Chief Executive Officer of Eli Lilly and Company (“Lilly”). He has served as president and chief executive officer since April 2008. He has been a member of Lilly’s board of directors since 2005 and was named chairman in 2008. Dr. Lechleiter began work at Lilly as a senior organic chemist in Lilly’s process research and development division in 1979. He is a member of the American Chemical Society, Business Roundtable, and Business Council. He serves on the boards of Pharmaceutical Research and Manufacturers of America (PhRMA), United Way Worldwide, Xavier University, the Life Sciences Foundation, Central Indiana Corporate Partnership, and the 2012 Indianapolis Super Bowl Host Committee.

Johnathan A. Rodgers

Mr. Rodgers, 66, a director since 2006, is the President and Chief Executive Officer of TV One, LLC. Prior to joining TV One, LLC in March 2003, Mr. Rodgers was President, Discovery Networks US for Discovery Communications, Inc. from 1996 to 2003. Prior to his work at Discovery Communications, Mr. Rodgers had a 20-year career at CBS, Inc. where he held a variety of executive positions, including President, CBS Television Stations. Mr. Rodgers is also a director of Procter & Gamble Company, a Trustee of the University of California —

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Berkeley.

Orin C. Smith

Mr. Smith, 70, a director since 2004, was President and Chief Executive Officer of Starbucks Corporation from 2000 to 2005. He joined Starbucks as Vice President and Chief Financial Officer in 1990, became President and Chief Operating Officer in 1994, and became a director of Starbucks in 1996. Prior to joining Starbucks, Mr. Smith spent a total of 14 years with Deloitte & Touche. He was later the Executive Vice President and Chief Financial Officer of two transportation companies. Between these assignments, he was Chief Policy and Finance Officer in the administrations of two Washington State Governors. Mr. Smith is currently the lead Director of the Board of Directors of The Walt Disney Company, and serves on the Board of Regents of the University of Washington.

John R. Thompson

Mr. Thompson, 71, a director since 1991, was head coach of the Georgetown University menâ&#x20AC;&#x2122;s basketball team from 1972 until 1998. Mr. Thompson was head coach of the 1988 United States Olympic basketball team. He hosts a sports radio talk show in Washington, D.C., and is a nationally broadcast sports analyst for Turner Network Television (TNT) and the Westwood One, Inc. radio network. He serves as Assistant to the President of Georgetown for Urban Affairs, and he is a past President of the National Association of Basketball Coaches and presently serves on its Board of Governors

Phyllis M. Wise Dr. Wise, 67, a director since 2009, is Vice President and Chancellor of the University of Illinois at Urbana-Champaign. She joined the University of Maryland School of Medicine as an assistant professor in 1976, was appointed associate professor in 1982, and professor in 1987. Dr. Wise was appointed a professor and chair of the department of physiology at the University of Kentucky in 1993, and was appointed dean of the division of biological sciences and distinguished professor of neurobiology at the University of California Davis in 2002. In 2005, she was appointed Vice President and Provost at the

Collin J. Myers

University of Washington, and served as Executive Vice President and Provost from 2007 to 2010, and interim President until July 2011, where she was also professor of physiology and biophysics, biology, and obstetrics and gynecology. Dr. Wise has a doctorate in zoology from the University of Michigan, has an honorary doctorate from Swarthmore College, and is an elected member of the Institute of Medicine.

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Figure 2

Figure 3

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Figure 4

Chairman of the Board, President & CEO (NIKE, Inc.),

President & Chief Executive Officer, NIKE, Inc.

President, NIKE Brand

Philip H. Knight Mr. Knight, 74, a director since 1968, is Chairman of the Board of Directors of NIKE. Mr. Knight is a co-‐founder of the Company and, except for the period from June 1983 through September 1984, served as its President from 1968 to 1990, and from June 2000 to 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State University. Mr. Knight led NIKE from a small partnership founded on a handshake to the world’s largest footwear, apparel, and equipment company. Mark G. Parker Mr. Parker, 56, has been President and Chief Executive Officer and a director since 2006. He 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. In addition to helping lead the continued growth of the Nike brand, Parker is responsible for the growth of NIKE, Inc.'s global business portfolio, which includes Converse Inc., and Hurley International LLC. Charlie Denson As President of the Nike Brand, Charlie Denson is responsible for leading the strategy of the world’s most distinctive, authentic and connected brand in sports, including oversight of the company’s major, global categories: Action Sports, Basketball, Football (Soccer), Men’s Training, Running, Sportswear, and Women’s Training, as well as the Jordan Brand and Nike Golf. After more than three decades, Denson has developed a deep expertise of the athletic consumer products industry and been instrumental in growing Nike to become one of the XVIII

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Vice President & Chief Financial Officer

President, Global Operations

Vice President, Global Brand & Category Management

world’s biggest brands. Starting as an assistant manager at Nike’s first retail store in Portland, Oregon in 1979, he learned the business from the ground up and understands the importance of creating and maintaining a strong connection with consumers. In his career, Denson ran the company’s U.S. and European operations and pioneered Nike’s expansion into China, India and Brazil. He’s been a constant innovator in developing sales and distribution strategies and driving global growth as Nike expanded into more than 160 countries. At the end of FY09, the Nike Brand reached $16.7 billion in sales. Don Blair For more than 10 years, Don Blair has been NIKE, Inc.’s Chief Financial Officer and a principal architect of the company’s strategies for delivering sustainable, profitable growth. He is responsible for the company’s finance, investor relations and strategic planning functions and for the last several years was named one of the best CFOs in the U.S. by a leading investment community publication. Before joining Nike, Blair held a series of U.S. and Asia-‐based finance and strategic planning positions over a 15-‐year career at PepsiCo. Gary Destefano As president of Nike Global Operations, Gary is responsible for driving growth in the Nike brand’s six geographic operating regions: North America, Western Europe, Central Eastern Europe, Japan, Greater China and Emerging Markets. Gary has been with Nike since 1982 and has held a wide range of positions including Vice President of Global Sales, President of North America, VP and GM of Asia Pacific. Trevor Edwards As Global Brand & Category Management Vice President, Trevor Edwards drives the growth around the company’s major category business units globally, responsible for nearly three-‐ quarters of the Nike brand’s growth, including: Basketball, Football (Soccer), Men’s Training, Running, Sportswear, and Women’s Training, Nike Golf as well as the Jordan Brand. Supporting the category business units, Edwards is also responsible for Nike’s global brand strategy and

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President, Direct to Consumer

overseeing all brand management functions, including digital and advertising, sports marketing, brand design, public relations and retail marketing. Edwards joined the company in 1992 as a Regional Marketing Manager and has held senior marketing positions in the Americas, the Europe/Middle East/Africa region, the U.S. and Global Brand Management. During his career he has led some of the brand’s most significant breakthrough innovations, including spearheading the creation of Nike+. Edwards helped transform the digital landscape and position Nike as a leader in the use of social media to connect with consumers. Nike+ provides running consumers with a unique, motivational experience, from product to training to connecting with a vibrant, global running community. Jeanne P. Jackson As President, Direct-‐to-‐Consumer for NIKE, Inc., Jeanne Jackson oversees the company’s global consumer-‐direct efforts, aligning the power of Nike’s brands to deliver a compelling consumer experience at retail and online. Jeanne’s career spans 30 years in Retailing and Marketing, having served as CEO of Walmart.com, CEO of Gap, Inc. Direct, President and CEO of Banana Republic. She’s also held retail leadership roles with Victoria’s Secret, The Walt Disney Company, Saks Fifth Avenue, and Federated Department Stores. Jeanne is a recognized industry leader, with profiles in Business Week’s “Top 25 Managers of the Year,” Fortune’s “The Fifty Most Powerful Women in American Business,” and “America’s Most Influential Women” by Vanity Fair.

Collin J. Myers

Vice President, Merchandising & Product

President, NIKE Affiliates

Eric Sprunk As Vice President of Merchandising & Product, Eric is responsible for all Nike brand product across the company’s footwear, equipment and apparel engines from design and development to manufacturing and sourcing, delivering compelling stories that excite, motivate and energize Nike consumers. Eric joined Nike in 1993 and has worked in senior financial, product and global management roles. His most recent position was Vice President of Global Footwear where he drove the footwear creation process – developing new concepts, driving innovation and ensuring supply chain management across the product categories. Before Nike, Eric was an executive at Price Waterhouse managing the Nike account. Roger Wyett As President of Nike Affiliates, Roger Wyett leads business and strategic direction across the NIKE, Inc. portfolio of affiliate brands, including Cole Haan, Converse Inc., Hurley International LLC and Umbro Ltd. Wyett joined Nike in 1994 after 14 years in the apparel industry in Los Angeles and held a number of key senior apparel roles in soccer and Nike Team Sports before leading Global Product Creation. In 2000, Wyett left Nike to join the Walt Disney Co., with roles as Senior Vice President for Global Apparel, Accessories and Footwear and Executive Vice President for Global Sales and Marketing for Consumer Products. Wyett returned to NIKE, Inc. in April 2005 as President and Chief Operating Officer of the company’s Hurley brand, and was later appointed Vice President, Global Apparel in 2006 before taking on his current role as President of Nike Affiliates

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