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NIKE, INC. ANNUAL SHAREHOLDERS MEETING

SEPTEMBER 22, 2008

This presentation is provided by NIKE, Inc. only for reference purposes. Information included was current only as of the date it was presented, and may have subsequently changed materially. NIKE, Inc. does not update or delete outdated information contained in this presentation, and disclaims any obligation to do so.

Presentation Transcript

Phil (Chairman, NIKE, Inc.): Will the meeting please come to order? I'm , Chairman, and it's my pleasure to welcome you to Nike's 28th annual shareholders meeting as a public company. First of all, I'll introduce to you your Board Of Directors.

Starting back here, , your CEO for the last two and a half years; , who is the President and Chief Operating Officer of Apple; John Connors, who is former of a little company called Microsoft and currently a venture capitalist in Seattle; Jeanne Jackson, formerly President of Banana Republic and Walmart.com, currently a consultant in Orange County; Ralph DeNunzio, former President of the Stock Exchange, former CEO of Kidder, Peabody; Doug Houser, principal in the important law firm of Bullivant, Houser, & Bailey and a Board member for over 40 years.

In the front row, John Thompson, former basketball coach of Georgetown University, former Olympic basketball coach, currently a radio talk show host in , D.C., and hot off the press from a prominent Internet site, he was named last week as the coolest brother of all time. Next to him is Orin Smith, former President and CEO of Starbucks.

Next to him is Jill Conway, former president of Smith College, visiting professor at MIT, the author of many books, eight of them under her own name. Next to her we have Alan Graf, who is Chief Financial Officer of FedEx; next to him Johnathan Rodgers, who is President and CEO of TV1. In addition, we have our auditors here, Julie Schlendorf of Pricewaterhouse and John Maxwell also of Pricewaterhouse. And I had mentioned that Chris Hummel of Broadridge, which will serve as the Inspector of our election.

The agenda for the meeting will be first to consider two matters to be voted on by the shareholders. After that, Mark Parker will report on the state of the business, and, finally, the officers will answer questions from the shareholders. You should have received a card in which you can write your questions. The question cards will be collected shortly, and at the end of the meeting we will answer as many questions as time permits. The results of the balloting will be announced shortly after the voting. John Coburn is the Secretary of Nike. John, was the notice of this meeting duly and properly given and is a quorum present?

John Coburn (Secretary, NIKE, Inc.): Yes, Phil, the notices were mailed in accordance with the Bylaws on August 8, 2008. A quorum of both Class A and Class B common stock is present today. There are present in person or by proxy 96.8% of the total outstanding

Class A shares entitled to vote at this meeting, and 88.4% of the total outstanding Class B shares entitled to vote at this meeting, which, in both cases, is more than the required majority needed for a quorum.

Phil Knight: Thank you, John. Since a quorum is present, I declare this annual meeting of the shareholders of NIKE, Incorporated duly convened. We will dispense with the reading of the minutes of the last annual meeting and proceed to the matters to be voted on. There are two matters to be voted on at this annual meeting, each of which is described in your proxy statement -- number one, the election of Directors, and two, the ratification and appointment of PricewaterhouseCoopers as Nike's auditors for the current fiscal year. I would like to ask the Secretary to present management's recommendations to the shareholders at this time.

John Coburn: Thank you. The first matter we will vote on is the election of Directors. Management's nominees for election by the Class A shares are John Connors, Timothy Cook, Ralph DeNunzio, Douglas Houser, Philip Knight, Mark Parker, Johnathan Rodgers, Orin Smith and John Thompson, Jr. Management's nominees for election by the Class B shares are Jill Conway, Alan Graf and Jeanne Jackson. I move that these nominees be elected to the Board Of Directors.

Phil Knight: Is there a second?

Unidentified Audience Member: Second.

Phil Knight: The Company has not received notice of any other nominations as required by the Bylaws. Therefore, I declare the nominations closed. The second matter to be voted on is the shareholder ratification to the appointment of PricewaterhouseCoopers as the Company's independent registered public accounting firm for fiscal 2009. I move that the selection of PricewaterhouseCoopers be ratified. Is there a second?

Unidentified Audience Member: Second.

Phil Knight: Does anyone need a ballot? Any shareholder who wants a ballot should raise his or her hand and the ushers will provide a ballot. It is not necessary to ask for a ballot if you have already sent in your proxy. If you have previously sent in a proxy, please do not execute a separate ballot unless you mark your ballot to show that a proxy was previously submitted and that you desire to revoke your proxy. There are separate ballots for Class A and Class B shareholders.

If any of you have questions written on your cards, please also pass them to the aisle and the ushers will collect them at this time. I now declare the polls closed. The Inspector Of Elections will now tally all votes on the measures and return the results to the secretary. I'll now turn the floor over to Chief Executive Officer, Mark Parker, who will review our performance for the fiscal year 2008.

Mark Parker (President & CEO, NIKE, Inc.): Okay, thank you, Phil, and thank you, all, for coming to the meeting today. I want to talk about the past year. Fiscal 2008 was a very strong year for Nike. We continued to expand our leadership in revenue and market share

here in the United States and around the world. We added $2.3 billion of incremental revenue to total $18.6 billion. And that's up 14% year-over-year growth in every region in every business.

Gross margin improved more than a percentage point to a new record high of 45%. Earnings per share grew 28% and we increased dividends by 23%, bought back $1.2 billion in stock, and increased our return on invested capital by 250 basis points. So by all measures fiscal year '08 really illustrates the consistent performance of the Nike business. We have a very strong financial model. We have a strong NIKE, Inc. team. And we add more innovative products and excitement to the marketplace than anybody else in the industry.

Two years ago we committed to growing to $23 billion in revenue by the end of fiscal year 2011, but only if it was a good kind of growth, growth that is profitable and sustainable. We feel very good about the progress we've made towards that goal. The power of the Nike will always be our strongest asset. It's our platform for innovation, it's how we build and leverage the power of sports, and it really represents the commitment to excellence we have in everything we do.

More than anything, the Nike brand is how we reach and reward consumers. To do that effectively, we focus on six key categories -- running, soccer, basketball, men's training, women's training and sportswear. We saw revenues increase in five of these six categories. The exception was basketball, which maintained revenue levels while growing share over this past year. On a reported basis, both global footwear and global apparel were up 14%. We did this all while keeping inventory levels in check and spending in check.

We continue to see more and more of our growth coming from key markets around the world, especially emerging markets. This year, for example, China surpassed $1 billion in revenue, and that was before the Olympics. We saw revenue pass $1 billion in our CEMEA regions of Central and Eastern Europe. Our Americas region also passed $1 billion in revenue for the first time, making fiscal year '08 a trifecta of billion dollar firsts for Nike in key emerging markets.

The strength and performance of the Nike brand gives us the flexibility we need to pursue growth opportunities across our portfolio of businesses. delivered its best year ever in fiscal year 2008 and continues to grow in the US and in the key emerging markets of China, Russia, and Brazil. Hurley and also had record years for revenue and pretax income. And NIKE golf increased revenue and pretax income as we widened our lead as the largest apparel business in the industry.

But growth in our subsidiary is only half the story. The other half is change. Our portfolio brands is based on three things. One is pursuing the greatest growth opportunities, two is leveraging and expanding our Nike resources, and last it's serving consumers with premium products and experiences in and around sports.

When we applied these three principals, we saw opportunities to take action in 2008. We sold the Starter and Bauer businesses and we acquired , one of the world's greatest football brands and a source of tremendous long-term growth potential for Nike. With Umbro, NIKE, Inc. becomes the biggest football presence on the planet. After all the work

we've done this year, I'm very pleased with how we've enhanced our position, performance and the potential of the Company.

Moving into the current fiscal year, 2008 truly was a summer of sport. If you saw win the US Open; if you saw Paul Pierce lead the Celtics to the NBA title; Rafael Nadal and Roger Federer at Wimbledon, one of the greatest matches in history; if you saw Fabregas at the European championships; if you saw these athletes, you saw some of the greatest athletes in the sport -- in the world of sports performing at a whole new level.

But the story of the summer was, of course, the Olympics. Our performance in Beijing was one of the proudest moments I've had in my nearly 30 years with this company. After four years of working with hundreds of athletes from all over the world, we created new and innovative products for all 28 sports at the Olympics.

We created brand-new technologies, like Flywire and Lunarlite cushioning, and game changing products, like the Hyperdunk basketball , the Zoom Victory Spike and the PreCool Vest. These are innovations that enhanced performance for our world-class athletes, and are resonating with consumers around the world.

We also created amazing destinations for consumers in Beijing, like the Nike exhibition space that highlighted the history and the future of Nike innovations, and the flagship store that generated record traffic and revenue. It was truly a tourist destination during the Games. So clearly the Chinese consumers have a passion for the Nike brand, and we're perfectly positioned to leverage that opportunity for the long-term.

As soon as the Olympic Torch was passed to London, we moved on to another global event, the Human Race. On August 31, runners took the streets in more than 25 cities as part of the earth's largest 10K race. Every runner was connected through Nike+ technology and the Nike+ website. In the end, hundreds of thousands of runners logged millions of miles for charity. It was a great day for running and a great day for Nike.

This year also marks the launch of a new initiative called the Girl Effect. It's a $100 million partnership between the Nike Foundation and Peter and Jennifer Buffett's NoVo Foundation. The premise of the Girl Effect is as simple as it is profound, and that is, when we invest in the health, the safety, the education of adolescent girls, we improve the quality of her life, her family, her village, her nation, and ultimately all of us.

The Girl Effect is part of our larger commitment to innovate for a better world. And that means designing products that are sustainable and responsible, it means supporting the rights of workers and leading by example on climate change, and it means engaging and investing in communities around the world where we work, live and play. We're not going to fix these things overnight, but we're getting closer every day and we're committed.

Going forward, we'll continue to focus on key growth opportunities to maximize value for our shareholders. There's a tremendous opportunity, as I said, in developed markets and rapidly emerging economies around the world, countries like China, Brazil, India, Turkey and Russia. We'll continue to be vigilant about our spending and strategic in our investments. We'll continue to focus on key categories that allow us to really connect with

consumers and deliver the kinds of products that enhance their performance and their quality of life.

We're developing new growth opportunities in emerging segments, like action sports, which is truly one of the fastest growing businesses in our industry today. And we'll continue to deliver premium consumer experiences at retail. We've seen firsthand the power of innovative products and superior service. We've seen it in our running experience at NikeTown in New York, the BootRoom in London, the House of Hoops Foot Locker store in New York, and every Nike iD Studio around the world.

And this is really what Nike is all about. We innovate on multiple fronts. We create a bigger, more vibrant marketplace. We deliver premium products and experiences to our consumers. That's what we do best, and we're doing it all over the world. We're living in interesting times today, as you know, culturally, financially, politically, and Nike is well prepared to navigate that landscape.

Business as usual is not enough to meet the demands and opportunities of the day. And Nike is not a business as usual company. There isn't a brand, or a team, or a future that I would trade with anybody in our industry. I'm glad I'm here at Nike. I'm glad you're here at Nike, and I look forward to seeing you all again next September. Thank you very much.

Phil Knight: Thank you, Mark. John, I see that you have received the report of the Inspector Of Election. Will you please give the results.

John Coburn: Yes, Phil. Holders of 100% of the Class A shares present voted in favor of the election of management's nominees for Class A directors, and holders of 98.1% of the Class B shares present and voting voted in favor of management's nominees for Class B directors. Holders of 98.4% of the Class A and Class B shares present and voting together ratified the selection of PricewaterhouseCoopers as the Company's independent registered public accounting firm.

Phil Knight: Thank you. The 12 nominees have been duly elected as Directors of the Company for the ensuing year. PricewaterhouseCoopers' selection as the independent registered public accounting firm for the next fiscal year has been ratified. And now, I'll ask Mark, and Charlie Denson, who is the President of Nike Brand, Hannah Jones, Vice President oversees Corporate Responsibility, Don Blair, who is the Vice President and Chief Financial Officer, get some expertise up here to answer your questions, which we have some place.

Questions and Answers (Questions read by Phil Knight) Phil Knight: If there are any other questions, we have just a few, pass them over and to the ushers. We'll add them to the list. Okay, we have two, four, five, six it looks like here.

Q: Phil, did you know that three of us fit snugly inside your locker at Autzen? We were there for the women's football clinic and we want to know why it is so empty.

A: Phil Knight: Well, yes. No, I don't know why it's so empty, but it's full on Saturdays, but maybe they don't market that women's football clinic very well. Enjoy the season and thank you for everything. Thank you.

Q: We have this question. So will Nike disclose the wage levels that workers are paid at each of Nike's partner factories around the world? If the answer is yes, wonderful, if it is, no, please explain why.

A: Phil Knight: Let me say that we take the labor relations issue very seriously. I think that we've made great progress over the last few years and we're determined to continue to make progress in the future. And that is a general overview. I'll let Hannah get a little more specific.

Hannah Jones (VP, Corporate Responsibility) : Yes, thank you, Phil. So, absolutely, the issue of labor conditions in the supply chain in the contract factories is something we work on extremely hard. And we do believe fundamentally that transparency is one of the keys to how we can try and affect systemic change across the industry.

On the issue of wages, I think the question around wages is a good question. They're actually not our wages to disclose. And so, what we are willing to do is to engage in a conversation with the factories about how we -- whether any of them are going to be willing to disclose wages. And above all, what we do commit to is to going deeper and deeper into the conversation around wage structure and the way in which wages are paid and the rates at which they're paid, and doing that in a collaborative and open way with stakeholders.

Q: When was the last stock split and do you have an idea as to when it might happen again? We'll let Don Blair tell you.

A: Don Blair (VP & CFO, NIKE, Inc.): Our last stock split was April of 2007, and we always look to the market and see how our stock is trading. Our objective is to make the stock accessible to retail investors. We'll obviously need to look very carefully at market conditions. But at this point, we don't have any specific timeframe in mind for the next stock split, but we continue to work on raising the price of the stock.

Q: Why not allow shareholders more authority to set executive pay?

A: Phil Knight: Yes, well, obviously the executive pay is something that this company takes very seriously, and I think if you've watched it over the years, I think you'll see that we've handled it really responsibly, obviously, compared to what the rest of the world is.

It isn't just a matter of kind of morality, it's also a matter of competitiveness. And we benchmark companies that we compete with, and we go into that very, very seriously. And I frankly think it's working just fine. And I think you'll also notice that you haven't seen any really kind of scandals or really even any kind of public relations problem related to this firm and its executive pay. So the true answer is we're going to keep doing it the way we're doing it.

Q: There's a related question that says why don't you target executive pay to the lowest employee pay?

A: Phil Knight: I would give kind of some of the same answer. And maybe, Mark, if you want to talk about that too. The targeting executive pay to employee pay, in other words, 30 times, 40 times, 400 times.

Mark Parker: Yes, well, we have a pay system that's basically based on levels within the Company, or bands as we call it internally. And we want to make sure that we are competitive within each of the various bands and there's a relative fairness across the Company from sort of top to bottom level or bottom to top level, depending on your perspective.

So, it's something that's reviewed very carefully by the Compensation Committee at the Board level, and we look at it certainly every year, and to some extent every committee meeting. So we are constantly making sure that we are trying to be competitive again, fair internally and then competitive from an external standpoint as well.

Q: A related question says why don't you limit Directors' pay? It isn't money, but power that motivates Directors. Also, they are probably on more than one Board.

A: Phil Knight: Well, I would just say that I think that our -- I think the shareholders of this company get great value from their Board Of Directors, that if you've listened to the companies and the experience they've had and if you've watched them over the years, they take their responsibility very, very seriously about representing the shareholders.

And, once again, if you benchmark it against other companies of our size, I think you'll find that our Board, you're getting great value for your Board. And I wouldn't change that at all.

Q: Nike acquired Umbro in 2008. Will Nike be acquiring anymore affiliates in 2009? Mr. Parker, you want to try that?

Mark Parker: That is a very common question. We get that all the time. I will say that we're continually open to looking at opportunities to expand kind of our current kind of strategic agenda as a company. No new acquisitions to really report at this time, but, again, we're looking at opportunities.

I think in terms of what we do with our cash, how we bring value to the Company in the longer-term, trying to optimize our growth potential as a company, acquisitions -- responsible acquisitions is definitely something we'll continue to proactively look at. So I guess stay tuned is all I can say on that, but we're looking.

Q: And the last question is how do you feel that the current financial crisis will affect Nike's business?

A: Phil Knight: I would just say historically, financial downturns have not really impacted sales and earnings. They have impacted receivable collections a little bit. So far, the early read is that that model is holding up, but this crisis seems to be a little deeper than a normal downturn, and nobody knows exactly where it goes. And maybe, Don Blair, you'd like to embellish on that.

Don Blair: We have a number of policies in place to make sure that we diversify our exposure to various banks and financial institutions. We deal with a very wide range of banks around the world. We've actually looked at our position.

We don't have any direct exposure to any of the companies that have gotten into trouble in the last couple of weeks, but, as Phil says, this is one of the times when you have to be very, very sharp in your core business and make sure that you're watching your exposures. And at this point, we feel very confident that we're doing the right things, but we're also appropriately cautious.

Phil Knight: We have not received notice of any other business to come before this meeting, so I now declare that this meeting is adjourned and I thank you for coming.