NIKE INC, DEF 14A, 1996-08-12

NIKE INC
DEF 14A, 1996-08-12
RUBBER & PLASTICS FOOTWEAR

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

NIKE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

NIKE, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

________________________________________________________________________

(2) Aggregate number of securities to which transaction applies:

________________________________________________________________________

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

________________________________________________________________________

(4) Proposed maximum aggregate value of transaction:

________________________________________________________________________
*Set forth the amount on which the filing fee is calculated and state
how it was determined.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount previously paid:_________________________________________________

(2) Form, Schedule or Registration Statement No.:___________________________

(3) Filing Party:___________________________________________________________

(4) Date Filed:_____________________________________________________________

Notes:

<PAGE>

[LOGO]

NIKE, Inc.
One Bowerman Drive
Beaverton, Oregon 97005-6453

August 12, 1996

To Our Shareholders:

You are cordially invited to attend the annual meeting of shareholders of
NIKE, Inc. to be held at the NIKE World Headquarters, One Bowerman Drive,
Beaverton, Oregon on Monday, September 16, 1996, at 10:00 A.M. Registration
will begin at 9:30 A.M. You must present an admission ticket enclosed in this
Proxy Statement.

I believe that the annual meeting provides an excellent opportunity for
shareholders to become better acquainted with NIKE and its directors and
officers. I hope that you will be able to attend.

Whether or not you plan to attend, the prompt execution and return of your
proxy card will both assure that your shares are represented at the meeting and
minimize the cost of proxy solicitation.

Sincerely,

/s/ Philip H. Knight
-----------------------------------------
Philip H. Knight
Chairman of the Board
and Chief Executive Officer
<PAGE>

[LOGO]

---------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 16, 1996

---------------------

To the Shareholders of NIKE, Inc.

The annual meeting of shareholders of NIKE, Inc., an Oregon corporation,
will be held on Monday, September 16, 1996, at 10:00 A.M., Pacific Daylight
Time, at the NIKE World Headquarters, One Bowerman Drive, Beaverton, Oregon,
for the following purposes:

1. To elect a Board of Directors for the ensuing year.

2. To ratify the appointment of Price Waterhouse as independent accountants.

3. To vote upon a shareholder proposal described in this proxy statement, if
the proposal is presented at the meeting.

4. To transact such other business as may properly come before the meeting.

All shareholders are invited to attend the meeting. Shareholders of record
at the close of business on July 22, 1996, the record date fixed by the Board
of Directors, are entitled to notice of and to vote at the meeting. You must
present an admission ticket enclosed in this Proxy Statement.

By Order of the Board of Directors

JOHN E. JAQUA
Secretary

Beaverton, Oregon
August 12, 1996

Whether or not you intend to be present at the meeting, please sign and date
the enclosed proxy and return it in the enclosed envelope.

<PAGE>

PROXY STATEMENT

The enclosed proxy is solicited by the Board of Directors of NIKE, Inc.
("NIKE" or the "Company") for use at the annual meeting of shareholders to be
held on September 16, 1996, and at any adjournment thereof (the "Annual
Meeting"). The Company expects to mail this proxy statement and the enclosed
proxy to shareholders on or about August 12, 1996.

The Company will bear the cost of solicitation of proxies. In addition to
the solicitation of proxies by mail, certain officers and employees of the
Company, without extra compensation, may also solicit proxies personally or by
telephone. The Company has retained Hill and Knowlton, Inc., New York, New
York, to assist in the solicitation of proxies from nominees and brokers at an
estimated fee of $8,000 plus related out-of- pocket expenses. Copies of proxy
solicitation materials will be furnished to fiduciaries, custodians and
brokerage houses for forwarding to the beneficial owners of shares held in
their names.

All valid proxies properly executed and received by the Company prior to the
Annual Meeting will be voted in accordance with the instructions specified in
the proxy. Where no instructions are given, shares will be voted FOR: (1) the
election of each of the named nominees for director and (2) ratification of
the appointment of Price Waterhouse as independent accountants; and AGAINST a
shareholder proposal regarding certain monitoring procedures for subcontract
manufacturers in Indonesia. A shareholder may choose to strike the names of
the proxy holders named in the enclosed proxy and insert other names.

A shareholder giving the enclosed proxy has the power to revoke it at any
time before it is exercised by affirmatively electing to vote in person at the
meeting or by delivering to John F. Coburn III, Assistant General Counsel of
NIKE, either an instrument of revocation or an executed proxy bearing a later
date.

VOTING SECURITIES

Holders of record of NIKE's Class A Common Stock ("Class A Stock") and
holders of record of NIKE's Class B Common Stock ("Class B Stock"), at the
close of business on July 22, 1996, will be entitled to vote at the Annual
Meeting. On that date,

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51,119,985 shares of Class A Stock and 92,676,298 shares of Class B Stock were
issued and outstanding. Neither class of Common Stock has cumulative voting
rights.

Each share of Class A Stock and each share of Class B Stock is entitled to
one vote on every matter submitted to the shareholders at the Annual Meeting.
With regard to Proposal 1, the election of directors, the holders of Class A
Stock and the holders of Class B Stock will vote separately. Holders of Class
B Stock are currently entitled to elect 25 percent of the total Board, rounded
up to the next whole number. Holders of Class A Stock are currently entitled
to elect the remaining directors. Under this formula, holders of Class B
Stock, voting separately, will elect four directors, and holders of Class A
Stock, voting separately, will elect 10 directors. Holders of Class A Stock
and holders of Class B Stock will vote together as one class on Proposals 2
and 3.

PROPOSAL 1

ELECTION OF DIRECTORS

A Board of 14 directors will be elected at the Annual Meeting. All of the
nominees were elected at the 1995 annual meeting of shareholders. Directors
will hold office until the next annual meeting of shareholders or until their
successors are elected and qualified.

William J. Bowerman, Thomas E. Clarke, Delbert J. Hayes and Jill K. Conway
are nominated by management for election by the holders of Class B Stock. The
other 10 nominees are nominated by management for election by the holders of
Class A Stock.

Under Oregon law, if a quorum of each class of shareholders is present at
the Annual Meeting, the 10 director nominees who receive the greatest number
of votes cast by holders of Class A Stock and the four director nominees who
receive the greatest number of votes cast by holders of Class B Stock will be
elected directors. Abstentions and broker non-votes will have no effect on the
results of the vote. Unless otherwise instructed, proxy holders will vote the
proxies they receive for the nominees listed below. If any nominee becomes
unable to serve, the holders of the proxies may, in their discretion, vote the
shares for a substitute nominee or nominees designated by the Board of
Directors.

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Background information on the nominees as of July 15, 1996, appears below:

NOMINEES FOR ELECTION BY CLASS A SHAREHOLDERS

Ralph D. DeNunzio--Mr. DeNunzio, 64, a director of the Company since 1988,
is President of Harbor Point Associates, Inc., New York, New York, a private
investment and consulting firm. Mr. DeNunzio was employed by the investment
banking firm of Kidder, Peabody & Co. Incorporated from 1953 to 1987, where he
served as President from 1977 to 1986, as Chief Executive Officer from 1980 to
1987 and as Chairman of the Board of Directors from 1986 to 1987. Mr. DeNunzio
served as Vice Chairman and Chairman of the Board of Governors of the New York
Stock Exchange from 1969 to 1972 and was President of the Securities Industry
Association in 1981. In 1970, Mr. DeNunzio headed the Securities Industry Task
Force, which led to enactment of the Securities Investor Protection Act of
1970 and establishment of the Securities Investor Protection Corporation. He
is also a director of AMP Incorporated, Federal Express Corporation and Harris
Corporation.

Richard K. Donahue--Mr. Donahue, 69, a director of the Company since 1977,
is Vice Chairman of the Board. He served as President and Chief Operating
Officer of the Company from 1990 until 1994. He has been a partner in the law
firm of Donahue & Donahue, Lowell, Massachusetts, since 1951. From 1961 to
1963, Mr. Donahue was an assistant to President John F. Kennedy. Mr. Donahue
is a former President of the Massachusetts Bar Association and the New England
Bar Association. He is a member of the John F. Kennedy Library Foundation and
the Chairman of the Foundation's Profiles in Courage Award Committee. He is a
trustee of the Joyce Foundation. Mr. Donahue is also a director of Epitope,
Inc. and Courier Corp.

Douglas G. Houser--Mr. Houser, 61, a director since 1970, is an Assistant
Secretary of the Company and has been a partner in the Portland, Oregon law
firm of Bullivant, Houser, Bailey, Pendergrass & Hoffman since 1965. 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. Mr. Houser and Philip H.
Knight are first cousins.

John E. Jaqua--Mr. Jaqua, 75, a director since 1968, is Secretary of NIKE
and has been a principal in the law firm of Jaqua & Wheatley, P.C., Eugene,
Oregon, since 1962. Mr. Jaqua has served as President of the Oregon State Bar
Association and as a State Delegate to the House of Delegates of the American
Bar Association.

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Philip H. Knight--Mr. Knight, 58, a director since 1968, is Chief Executive
Officer and 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 June 1990. 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.

Kenichi Ohmae--Mr. Ohmae, 53, was, until his resignation in 1994, Managing
Director of McKinsey & Company, Inc., an international business consulting
firm, with which he had been employed for over 20 years. Mr. Ohmae serves as
an advisor to many large companies in various industries around the world. He
is the author of numerous books on global business strategy, including THE
BORDERLESS WORLD, THE MIND OF THE STRATEGIST, TRIAD POWER: THE COMING SHAPE OF
GLOBAL COMPETITION, and BEYOND NATIONAL BORDERS: REFLECTIONS ON JAPAN AND THE
WORLD. He is also a Director of Heisei Research Institute in Japan.

Ralph A. Pfeiffer, Jr.--Mr. Pfeiffer, 69, a director since June 1992,
retired in 1986 as IBM Senior Vice President, Chairman and Chief Executive
Officer of IBM World Trade Corporation, and Chairman and Chief Executive
Officer of IBM World Trade Asia Pacific Group B. In 1974, he was elected an
IBM Senior Vice President and became Chairman and Chief Executive Officer of
the IBM World Trade Americas/Far East Corporation. In 1983, he was named a
member of the Corporate Management Board and, in 1984, was appointed Chairman
and Chief Executive Officer of the IBM World Trade Corporation. Mr. Pfeiffer
is a director of Campbell Soup Company, The Royal Bank of Canada, IBM World
Trade Corporation, Osiris Therapeutics, Inc., Arthur D. Little, Inc., and New
York Life Mainstay Funds. He is also a member of the Council on Foreign
Relations; a member of the Economic Club of New York; a member of the Inter-
American Dialogue; a member of the International Advisory Board, University of
South Carolina; and a member of the Board of Trustees of Covenant House.

Charles W. Robinson--Mr. Robinson, 76, a director since 1978, is Chairman
and President of Robinson & Associates, Inc., Santa Fe, New Mexico, a venture
capital firm. From January 1978 to January 1979, Mr. Robinson was Vice
Chairman of the Board of Blyth, Eastman, Dillon & Co., Inc. and from March
1977 to December 1977, was Senior Managing Director of Kuhn Loeb & Co.,
Incorporated. Mr. Robinson served as Under- secretary of State for Economic
Affairs from 1974 to 1976, at which time he was

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appointed Deputy Secretary of State. From 1964 to 1974, Mr. Robinson was
President of Marcona Corporation. Mr. Robinson is also a director of The Allen
Group, Inc., and a trustee of The Brookings Institution.

A. Michael Spence--Dr. Spence, 52, has been the Philip H. Knight Profesor
and Dean of the Graduate School of Business at Stanford University since 1990.
From 1984 to 1990 he was Dean of the Faculty of Arts and Sciences at Harvard
University. He was professor of economics and business administration at
Harvard University from 1977 to 1986. He is the author of three books and
numerous articles on economics and business. Dr. Spence is also a director of
Bank of America NT & SA, Sun Microsystems, Inc., Verifone, Inc. and General
Mills, Inc.

John R. Thompson, Jr.--Mr. Thompson, 54, a director since 1991, has been
head coach of the Georgetown University men's basketball team since 1972. Mr.
Thompson also serves as Assistant to the President of Georgetown for Urban
Affairs. Mr. Thompson was head coach of the 1988 United States Olympic
basketball team. He is a past President of the National Association of
Basketball Coaches and presently serves on its Board of Governors.

NOMINEES FOR ELECTION BY CLASS B SHAREHOLDERS

William J. Bowerman--Mr. Bowerman, 85, a director since 1968, has served as
Deputy Chairman of the Board and Senior Vice President of NIKE since 1980.
Mr. Bowerman is a co-founder of the Company and served as Vice President from
1968 to 1980. From 1949 to 1972, Mr. Bowerman was head track coach at the
University of Oregon, and he served as coach of the United States Olympic
track team in 1972.

Thomas E. Clarke--Dr. Clarke, 45, joined the Company in 1980, and was
elected President and Chief Operating Officer in 1994. Dr. Clarke has held
various positions with the Company, primarily in research, design, development
and marketing. He was appointed divisional vice president in charge of
marketing in 1987. He was elected Vice President in 1989 and appointed General
Manager in 1990. Dr. Clarke holds a Doctorate degree in biomechanics.

Jill K. Conway--Dr. Conway, 61, a director since 1987, is currently a
Visiting Scholar with the Massachusetts Institute of Technology's Program in
Science, Technology and Society. Dr. Conway was President of Smith College,
Northampton,

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Massachusetts, from 1975 to 1985. She was affiliated with the University of
Toronto from 1964 to 1975, and held the position of Vice President, Internal
Affairs from 1973 to 1975. Her field of academic specialty is history. Dr.
Conway is currently a director of Merrill Lynch & Co., Inc., Arthur D. Little,
Inc., The Allen Group, Inc., and Colgate-Palmolive Company and a member of the
Advisory Board of IBM World Trade Americas/Far East Corporation. She is
currently a trustee of Mount Holyoke College and New England Medical Center.

Delbert J. Hayes--Mr. Hayes, 61, a director since 1975, served as Executive
Vice President of NIKE from 1980 to April 1995. Mr. Hayes served as Treasurer
and in a number of other executive positions with the Company from 1975 to
1980. Mr. Hayes was a partner with Hayes, Nyman & Co., certified public
accountants, from 1970 to 1975. Prior to 1970, Mr. Hayes was a certified
public accountant with Price Waterhouse for eight years.

BOARD OF DIRECTORS AND COMMITTEES

The Board currently has an Executive Committee, an Audit Committee, a
Personnel Committee, a Finance Committee, and a Compensation Plan Subcommittee
of the Personnel Committee, and may also appoint other committees from time to
time. There is currently no Nominating Committee. There were five meetings of
the Board of Directors during the last fiscal year. Each director attended at
least 75 percent of the total number of meetings of the Board of Directors and
committees on which he or she served, except for Mr. Thompson, who attended 63
percent.

The Executive Committee of the Board is currently composed of Messrs. Knight
(Chairman) and Clarke. The Executive Committee is authorized to act on behalf
of the Board on all corporate actions for which applicable law does not
require participation by the full Board. In practice, the Executive Committee
acts in place of the full Board only when emergency issues or scheduling make
it difficult or impracticable to assemble the full Board. All actions taken by
the Executive Committee must be reported at the next Board meeting. The
Executive Committee held no formal meetings during the fiscal year ended May
31, 1996, but took actions from time to time pursuant to written consent
resolutions.

The Audit Committee is currently composed of Mr. Hayes (Chairman), Mr.
Houser and Mr. Spence. The Audit Committee reviews and makes recommendations
to the Board

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regarding services provided by the independent accountants, reviews with the
independent accountants the scope and results of their annual examination of
the Company's consolidated financial statements and any recommendations they
may have, and makes recommendations to the Board with respect to the
engagement or discharge of the independent accountants. The Audit Committee
also reviews the Company's procedures with respect to maintaining books and
records, the adequacy and implementation of internal auditing, accounting and
financial controls, and the Company's policies concerning financial reporting
and business practices. The Audit Committee met twice during the fiscal year
ended May 31, 1996.

The Personnel Committee is currently composed of Mr. DeNunzio (Chairman),
Dr. Conway, Mr. Jaqua, Mr. Pfeiffer and Mr. Thompson. The Personnel Committee
makes recommendations to the Board regarding officers' compensation,
management incentive compensation arrangements and profit sharing plan
contributions. The Personnel Committee met three times during the fiscal year
ended May 31, 1996.

The Finance Committee is currently composed of Messrs. Robinson (Chairman),
DeNunzio, Hayes and Pfeiffer. The Finance Committee considers long-term
financing options and needs of the Company, long-range tax and currency issues
facing the Company, and management recommendations concerning major capital
expenditures and material acquisitions or divestments. The Finance Committee
met five times during the fiscal year ended May 31, 1996.

The Compensation Plan Subcommittee of the Personnel Committee is currently
composed of Dr. Conway and Mr. Pfeiffer. The Subcommittee grants options under
NIKE's employee stock option plan and determines targets and awards under
NIKE's Executive Performance Sharing Plan.

DIRECTORS COMPENSATION AND RETIREMENT PLAN

Messrs. Knight and Clarke do not receive additional compensation for their
services as directors. All other directors are paid a fee of $18,000 per year
plus $2,000 for each Board meeting attended and $1,000 for each committee
meeting attended, except that no fee is paid for attending Compensation Plan
Subcommittee meetings. In addition, directors are reimbursed for travel and
other expenses incurred in attending Board and committee meetings. The Company
also provides its non-employee directors medical insurance and $500,000 of
life insurance coverage.

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In 1989 and 1993 the Board of Directors approved resolutions that provide
certain benefits to directors who have served in that capacity for five years
or more. The plan provides that after ten years of service by a non-employee
director, the Company will provide such director for the remainder of his or
her life with $500,000 of life insurance and medical insurance at the levels
provided by the Company to all of its employees at the time such director
retires. The plan also provides that a director who has served for at least
five years will receive an annual retirement benefit for life, commencing on
the later of age 65 or the date the director retires or ceases to be a member
of the Board. New directors elected after the 1993 fiscal year must retire at
age 72. The retirement benefit is equal to a sliding percentage of the
director's last annual Board fee (excluding meeting fees) beginning at 50
percent of the Board fee for five years of service up to a maximum of 100
percent of the Board fee for 10 or more years of service.

STOCK HOLDINGS OF CERTAIN OWNERS AND MANAGEMENT

The following table sets forth the number of shares of each class of NIKE
securities beneficially owned, as of July 15, 1996, by (i) each person known
to the Company to be the beneficial owner of more than 5 percent of any class
of the Company's securities, (ii) each of the nominees for director, (iii)
each executive officer listed in the Summary Compensation Table ("Named
Officers"), and (iv) all nominees, Named Officers, and other executive
officers as a group. Because Class A Stock is convertible into Class B Stock
on a share-for-share basis, each beneficial owner of Class A Stock is deemed
by the Securities and Exchange Commission to be a beneficial owner of the same
number of shares of Class B Stock. Therefore, in indicating a person's
beneficial ownership of shares of Class B Stock in the table, it has been
assumed that such person has converted into Class B Stock all shares of Class
A Stock of which such person is a beneficial owner. For these reasons the
table contains substantial duplications in the numbers of shares and
percentages of Class A and Class B Stock shown for Messrs. Knight, Bowerman,
Hayes and Jaqua and for all directors and officers as a group.

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<TABLE>
<CAPTION>
Shares Percent
Title of Beneficially of
Class Owned(1) Class(7)
--------- ------------ --------
<S> <C> <C> <C>
William J. Bowerman Class A 58,080 0.1%
Eugene, Oregon Class B 85,624
Thomas E. Clarke(5) Class B 178,182(2)(3) 0.2%
Portland, Oregon
Jill K. Conway Class B 65,800(2)
Boston, Massachusetts
Ralph D. DeNunzio Class B 124,000(2) 0.1%
Riverside, Connecticut
Richard K. Donahue Class B 656,546(2) 0.6%
Lowell, Massachusetts
Delbert J. Hayes Class A 400,000 0.8%
Newberg, Oregon Class B 412,570(3) 0.4%
Douglas G. Houser Class B 44,000
Portland, Oregon
John E. Jaqua Class A 392,420 0.8%
Eugene, Oregon Class B 392,846 0.4%
Philip H. Knight(5) Class A 47,945,796(4) 93.8%
Beaverton, Oregon Class B 47,945,796(4) 34.1%
Kenichi Ohmae Class B 12,000(2)
Tokyo, Japan
Ralph A. Pfeiffer, Jr. Class B 62,000(2)
New York, New York
Charles W. Robinson Class B 250,000 0.3%
Santa Fe, New Mexico
Michael Spence Class B 2,000(2)
Palo Alto, CA
John R. Thompson, Jr. Class B 36,000(2)
Washington, D.C.
Harry A. Carsh(5) Class B 683(3)
Tigard, Oregon
Mark G. Parker(5) Class B 92,743(2)(3)
Portland, Oregon
David B. Taylor(5) Class B 181,034(2)(3) 0.2%
Beaverton, Oregon
Nissho Iwai American Corporation Preferred(6) 300,000 100.0%
Portland, Oregon
All directors and executive officers Class A 48,796,296 95.5%
as a group (23 persons) Class B 50,842,249(2) 35.9%
</TABLE>

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- ----------
(1) A person is considered to beneficially own any shares: (a) over which such
person exercises sole or shared voting or investment power, or (b) of
which such person has the right to acquire beneficial ownership at any
time within 60 days (i.e., through conversion of securities or exercise of
stock options). Unless otherwise indicated, voting and investment power
relating to the above shares is exercised solely by the beneficial owner
or shared by such owner and such owner's spouse or children. These figures
have been adjusted to reflect the 2-for-1 stock split that occurred on
October 30, 1995.

(2) These amounts include the right to acquire, pursuant to the exercise of
stock options, within 60 days after July 15, 1996, the following numbers
of shares: 177,372 shares for Dr. Clarke, 50,000 shares for Dr. Conway,
120,000 shares for Mr. DeNunzio, 466,946 shares for Mr. Donahue, 60,000
shares for Mr. Pfeiffer, 2,000 shares for Dr. Spence, 34,000 shares for
Mr. Thompson, 91,728 shares for Mr. Parker, 12,000 shares for Mr. Ohmae,
178,834 shares for Mr. Taylor, and 1,099,406 shares for the group.

(3) Includes shares held in account under the NIKE, Inc. 401(k) Employee
Savings Plan for Dr. Clarke and Messrs. Hayes, Carsh, Parker, and Taylor
in the amounts of 810, 170, 683, 1,015 and 1,400 shares, respectively.

(4) Includes 1,684,208 shares held by a limited partnership in which a
corporation owned by Mr. Knight's spouse is a co-general partner, and
32,612 shares owned by such corporation.

(5) Executive officer listed in the Summary Compensation Table.

(6) Preferred Stock does not have general voting rights except as provided by
law, and under certain circumstances as provided in the Company's Restated
Articles of Incorporation, as amended.

(7) Omitted if less than 0.1 percent.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission, the New York Stock Exchange and the
Pacific Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than 10 percent shareholders are required by
the regulations of the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) forms they file. To the

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Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports
were required, during the fiscal year ended May 31, 1996 all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10
percent beneficial owners were complied with, except that one report, covering
a purchase of 40 shares for his daughter's trust, was filed late for Robert S.
Falcone.

EXECUTIVE COMPENSATION

The following table discloses compensation awarded to, earned by, or paid to
the Company's Chief Executive Officer and its next four most highly
compensated executive officers for all services rendered by them in all
capacities to the Company and its subsidiaries during the fiscal year ended
May 31, 1996 and the two preceding fiscal years.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long-term
Annual Compensation
Compensation Awards
--------------------------------------- ------------- All Other
Name and Principal Other Annual Stock
Compensation
Position Year Salary($) Bonus($) Compensation($) Options(#)(1) ($)(2)
------------------ ---- --------- -------- --------------- ------------- -----------
- -
<S> <C> <C> <C> <C> <C> <C>
Philip H. Knight........ 1996 939,167 915,688 -- --
686,203(5)
Chief Executive Officer 1995 864,583 787,500 -- -- 522,294
1994 750,000 150,000 68,315(4) -- 519,096
Thomas E. Clarke........ 1996 670,833 603,750 -- 70,000
331,304(3)(6)(7)
President and 1995 625,000 515,625 -- 66,946 26,840
Chief Operating Officer 1994 370,833 112,438 -- 36,698 310,360
Mark G. Parker.......... 1996 495,833 409,062 -- 60,000
126,316(3)(6)(7)
V.P. and General 1995 442,500 337,500 -- 30,126 81,300
Manager 1994 357,083 99,806 -- 33,028 78,040
Consumer Product
Marketing
Harry C. Carsh.......... 1996 349,167 261,875 -- 28,000
68,651(3)
V.P. and General 1995 338,750 229,500 -- 26,778 30,419
Manager 1994 326,812 48,750 -- 29,358 28,105
Sports and Fitness
David B. Taylor......... 1996 347,916 260,937 -- 28,000 64,227
Vice President 1995 322,917 219,375 -- 26,778 26,044
Production 1994 297,916 39,960 -- 29,358 25,081
</TABLE>

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- ----------
(1) These figures have been adjusted to reflect the 2-for-1 stock split that
occurred on October 30, 1995.

(2) Includes contributions by the Company to the 401(K) and Profit Sharing
Plan for the fiscal year ended May 31, 1996 in the amount of $17,444 each
for Dr. Clarke and Messrs. Parker, Carsh and Taylor, and $13,694 for Mr.
Knight. The Company also made a matching contribution of $1,125 to the
after-tax retirement plan for Mr. Taylor. Also includes contributions by
the Company to the Supplemental Executive Profit Sharing Plan for Messrs.
Knight, Clarke, Parker, Carsh, and Taylor of $172,509, $132,977, $77,742,
$46,902, and $45,658, respectively.

(3) Includes above-market interest on deferred compensation for Dr. Clarke and
Messrs. Parker and Carsh in the amount of $824, $887, and $4,305,
respectively, for the 1996 fiscal year.

(4) The Company provided Mr. Knight with occasional non-business use of an
airplane in fiscal 1994. The Company's aggregate incremental cost for Mr.
Knight's non-business airplane use in 1994 was $65,795.

(5) The Company paid $500,000 towards a portion of the annual premium for term
life insurance on the life of Mr. Knight pursuant to a "split dollar"
plan. The Company would be reimbursed for its payments from the proceeds
of the life insurance policies in the event Mr. Knight dies.

(6) Pursuant to the terms of certain stock options, in fiscal year 1996 the
Company made a cash payment of $1.36 per share to Mr. Parker for the
exercise of 20,000 of Mr. Parker's stock options in fiscal year 1996
($27,200) and a cash payment of $3.578 per share to Dr. Clarke for the
exercise of 50,000 of Dr. Clarke's stock options in fiscal year 1996
($178,900).

(7) The Company provided supplemental long-term disability insurance to Dr.
Clarke and Mr. Parker at a cost of $1,159 and $3,043 respectively.

12
<PAGE>

OPTION GRANTS IN THE FISCAL YEAR ENDED MAY 31, 1996
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
% of Total Stock Price
Options Options Granted Exercise or Appreciation for
Granted to Employees in Base Price Expiration Option Term(4)
Name (#)(1)(2) Fiscal Year ($/share)(1)(3) Date 5%($) 10%($)
---- --------- --------------- --------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Philip H. Knight........ -- -- -- -- -- --
Thomas E. Clarke........ 70,000 5.6% $42.00 6/30/05 $1,848,950 $4,685,603
Mark G. Parker.......... 60,000 4.8% $42.00 6/30/05 $1,584,814 $4,016,231
Harry C. Carsh.......... 28,000 2.2% $42.00 6/30/05 $ 739,580 $1,874,241
David B. Taylor......... 28,000 2.2% $42.00 6/30/05 $ 739,580 $1,874,241
</TABLE>
- ----------
(1) These figures have been adjusted to reflect the 2-for-1 stock split that
occurred on October 30, 1995.

(2) All options shown in the table become exercisable with respect to 25% of
the total number of shares on each of July 1, 1996, 1997, 1998, and 1999,
except Mr. Parker's grant, of which 20,000 of the 60,000 shares become
exercisable on each of the first three anniversaries of the grant date.
All options will become fully exercisable generally upon the approval by
the Company's shareholders of a merger, plan of exchange, sale of
substantially all of the Company's assets or plan of liquidation.

(3) The exercise price is the market price of Class B Stock on the date the
options were granted.

(4) Assumed annual appreciation rates are set by the SEC and are not a
forecast of future appreciation. The actual realized value depends on the
market value of the Class B Stock on the exercise date, and no gain to the
optionees is possible without an increase in the price of the Class B
Stock. All assumed values are before taxes and do not include dividends.

13
<PAGE>

AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR ENDED MAY 31, 1996 AND FISCAL
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
Fiscal Year-End(#) at Fiscal Year-End($)(2)
------------------------- -------------------------
Shares
Acquired on Value
Name Exercise(#)(1) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip H. Knight........ -- -- -- -- -- --
Thomas E. Clarke........ 50,000 $2,101,970 126,736 176,908 $11,140,047 $11,754,597
Mark G. Parker.......... 20,000 $1,108,425 47,531 135,623 $ 4,241,535 $ 8,955,620
Harry C. Carsh.......... 14,694 $ 312,252 -0- 109,888 -0- $ 7,577,450
David B. Taylor......... 20,000 $ 775,624 134,694 107,888 $11,604,123 $ 7,414,387

</TABLE>
- ----------
(1) These figures have been adjusted to reflect the 2-for-1 stock split that
occurred on October 30, 1995.

(2) Based on a fair market value as of May 31, 1996 of $100.375 per share.
Values are stated on a pre-tax basis.

Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934, the following Performance Graph and the Report on pages 15-20 shall not
be incorporated by reference into any such filings and shall not otherwise be
deemed filed under such acts.

14
<PAGE>

PERFORMANCE GRAPH

The following graph demonstrates a five-year comparison of cumulative total
returns for NIKE's Class B Stock, the Standard & Poor's 500 Stock Index, and
the Standard & Poor's Shoes and Apparel Indices. The graph assumes an
investment of $100 on May 31, 1991 in each of the Company's Common Stock, and
the stocks comprising the Standard & Poor's 500 Stock Index and the Standard &
Poor's Shoes and Apparel Indices. Each of the indices assumes that all
dividends were reinvested.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG NIKE, INC., S&P 500 INDEX,
S&P SHOES INDEX AND S&P APPAREL INDEX

PERFORMANCE GRAPH APPEARS HERE

<TABLE>
<CAPTION>
S&P S&P
Measurement Period S&P SHOES APPAREL
(Fiscal Year Covered) NIKE, INC. 500 INDEX INDEX INDEX
- --------------------- ---------- --------- -------- --------
<S> <C> <C> <C> <C>
Measurement Pt-5/31/1991 $100.00 $100.00 $100.00 $100.00
FYE 5/31/1992 $147.49 $109.85 $128.89 $101.15
FYE 5/31/1993 $186.08 $122.61 $158.06 $ 99.66
FYE 5/31/1994 $153.90 $127.83 $134.34 $ 83.76
FYE 5/31/1995 $208.51 $153.64 $155.96 $ 85.67
FYE 5/31/1996 $535.61 $197.33 $299.52 $107.85
</TABLE>

- ----------
The Standard & Poor's Shoes Index consists of NIKE, Reebok International,
Brown Group, Inc. and Stride Rite Corporation. The Standard & Poor's Apparel
Index consists of Liz Claiborne, Inc., Russell Corp., Fruit of the Loom,
Springs Industries, Inc. and VF Corp. The Standard & Poor's Shoe and Apparel
Indices include companies in each of two major lines of business in which the
Company competes. The indices do not encompass all of the Company's
competitors, nor all product categories and lines of business in which the
Company is engaged. Because NIKE is part of the S&P Shoe Index, the price and
returns of NIKE stock affect this index.

The Stock Performance shown on the Graph above is not necessarily indicative
of future performance. The Company will not make nor endorse any predictions
as to future stock performance.

15
<PAGE>

REPORT OF THE PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION

The Personnel Committee of the Board of Directors (the "Committee"), subject
to the approval of the Board of Directors, determines the compensation of the
Company's five most highly compensated executive officers, including the Chief
Executive Officer, and oversees the administration of executive compensation
programs, except that stock option grants, and targets and awards under the
Executive Performance Sharing Plan, are made by the Compensation Plan
Subcommittee, which is composed of outside directors.

Executive Compensation Policies and Programs. The Company's executive
compensation programs are designed to attract and retain highly qualified
executives and to motivate them to maximize shareholder returns by achieving
both short- and long-term strategic Company goals. The programs link each
executive's compensation directly to individual and Company performance. A
significant portion of each executive's total compensation is variable and
dependent upon the attainment of strategic and financial goals, individual
performance objectives, and the appreciation in value of the Common Stock.

There are three basic components to the NIKE's "pay for performance" system:
base pay; annual incentive bonus; and long-term, equity-based incentive
compensation. Each component is addressed in the context of individual and
Company performance, competitive conditions and equity among employees. In
determining competitive compensation levels, the Company analyzes information
from several independent surveys which include information regarding the
general industry as well as other consumer product companies. Since the
Company's market for executive talent extends beyond the sports and fitness
industry, the survey data includes global name-brand consumer product
companies with sales in excess of $2 billion. A comparison of the NIKE's
financial performance with that of the companies and indices shown in the
Performance Graph is only one of many factors considered by the Committee to
determine executive compensation.

Base Pay. Base pay is designed to be competitive, although conservative
(generally in the second quartile) as compared to salary levels for equivalent
executive positions at other global consumer product companies. The
executive's actual salary within this competitive framework will vary based on
responsibilities, experience, leadership, potential future contribution, and
demonstrated individual performance (measured against strategic management
objectives such as maintaining customer satisfaction, developing innovative
products, strengthening market share, and expanding

16
<PAGE>

the markets for the Company's products). The types and relative importance of
specific financial and other business objectives vary among the Company's
executives depending on their positions and the particular operations or
functions for which they are responsible. The Company's philosophy and
practice is to place a relatively greater emphasis on the incentive components
of compensation.

Annual Incentive Bonus. Each executive is eligible to receive an annual cash
bonus under the Executive Performance Sharing Plan approved by shareholders in
1995. The "target" level for that bonus, like the base salary level, is set
with reference to Company-wide bonus programs, as well as competitive
conditions. These target levels are intended to motivate the Company's
executives by providing substantial bonus payments for the achievement of
financial goals within the Company's business plan. An executive receives a
percentage of his or her target bonus depending on the extent to which the
Company achieves financial performance goals set by the Committee and the
Board, as measured by the Company's net income before taxes. Bonuses may
exceed the target if the Company's performance exceeds the goal.

Long-Term, Equity-Based Incentive Compensation. The long-term equity-based
compensation program is tied directly to shareholder return. Under the current
program, long-term incentive compensation consists of stock options, 25% of
which vest in each of the four years after grant. Stock options are awarded
with an exercise price equal to the fair market value of the Class B Common
Stock on the date of grant. Accordingly, the executive is rewarded only if the
market price of the Common Stock appreciates.

Since long-term options vest over time, the Company periodically grants new
options to provide continuing incentives for future performance. The size of
previous grants and the number of options held are considered by the
Compensation Plan Subcommittee, but are not entirely determinative of future
grants. Like base pay, the grant is set with regard to competitive
considerations, and each individual's actual grant is based upon individual
performance measured against the criteria described in the preceding
paragraphs and the executive's potential for future contributions.

Stock options are designed to align the interests of the Company's
executives with those of shareholders by encouraging executives to enhance the
value of the Company and, hence, the price of the Common Stock and the
shareholders' return. In addition, through deferred vesting, this component of
the compensation system is designed to create an incentive for the individual
executive to remain with the Company.

17
<PAGE>

Retirement Plans. NIKE maintains combined profit sharing and 401(k)
retirement plans, and a Supplemental Executive Profit Sharing Plan. Under the
profit sharing retirement plan, the Company annually contributes to a trust on
behalf of employees, including executive officers, an amount determined by the
Board of Directors that has historically approximated 1.7% of the Company's
pre-tax income. After allocation of this amount for fiscal 1996 under the
terms of the profit sharing plan, each employee, including each executive
officer, received a contribution to his or her plan account of 6.94% of the
employee's total salary and bonus up to $150,000 of salary and bonus, and 4%
of the employee's total salary and bonus in excess of approximately $62,000
and below $150,000. Under the terms of the new Supplemental Executive Profit
Sharing Plan, employees, including executive officers, whose total salary and
bonus exceeds $150,000 receive a supplemental profit sharing contribution into
a nonqualified deferred compensation account in an amount equal to the
additional contribution they would have received under the profit sharing plan
if not for the $150,000 cap on salary and bonus considered for purposes of
that plan as required under IRS regulations. Accordingly, those employees each
received supplemental contributions equal to 10.94% of their salary and bonus
in excess of $150,000. These profit sharing plans serve to retain employees
and executives, since profit sharing funds do not fully vest until after five
years of employment with the Company.

Under the 401(k) retirement plan, the Company contributes up to 2.5% of each
employee's earnings as a matching contribution for pre-tax amounts deferred
into the plan, and up to 0.75% for after-tax amounts deferred into the plan.
This matching contribution is invested entirely in NIKE Class B Common Stock,
which strengthens the linkage between employee and shareholder interests.

Annual Reviews. Each year, the Committee reviews the executive compensation
policies with respect to the linkage between executive compensation and the
creation of shareholder value, as well as the competitiveness of the programs.
The Committee determines what changes, if any, are appropriate in the
compensation programs for the following year. In conducting the annual review,
the Committee considers information provided by Human Resources staff and uses
surveys and reports prepared by independent compensation consultants.

Each year, the Committee, with the President and Human Resources staff,
reviews the individual performance of each of the other five most highly
compensated executive officers, including the Chief Executive Officer, and the
President's recommendations

18
<PAGE>

with respect to the appropriate compensation levels and awards. The
Compensation Plan Subcommittee sets performance and bonus targets, and
certifies awards, under the Executive Performance Sharing Plan and makes stock
option grants. The Committee makes recommendations to the Board of Directors
for final approval of all other compensation matters. The Committee also
reviews with the President and the Human Resources staff the financial and
other strategic objectives, such as those identified above, for each of the
named executive officers for the following year.

For fiscal year 1996, the Company exceeded the targeted financial
performance objectives set for named executive officers under the Executive
Performance Sharing Plan. This resulted from outstanding growth in the
Company's total revenues and earnings. According to the Plan, the named
executive officers received 150% of their targeted incentive bonuses.

Chief Executive Officer. In reviewing Mr. Knight's performance, the
Committee focused primarily on the Company's remarkable performance in fiscal
year 1996, which reflected (1) strong growth in sales and earnings, and (2)
continued progress toward the achievement of various strategic and financial
objectives such as expansion into and development of international markets.
The Committee also considered the other factors and considerations described
above. In addition to the incentive bonus, the Committee increased Mr.
Knight's base salary for the 1997 fiscal year to approximately $1,050,000.

Mr. Knight's position as the founder of and a substantial shareholder in the
Company provides an effective long-term performance incentive tied directly to
shareholder return. Accordingly, he received no stock option awards.

Section 162(m) of the Internal Revenue Code. In 1995 the shareholders
adopted the Executive Performance Sharing Plan. The Plan is designed to
satisfy the performance-based exception to the Section 162(m) limitation on
deductibility with respect to incentive bonus compensation for named executive
officers. The Company intends to take actions within the allowable transition
period to exempt the performance-based stock option plan from the
deductibility limitation.

19
<PAGE>

Members of the Personnel Committee:

Ralph DeNunzio, Chairman
Jill K. Conway*
John E. Jaqua
Ralph A. Pfeiffer, Jr.*
John R. Thompson, Jr.
- ----------
*Also members of the Compensation Plan Subcommittee.

PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Personnel Committee of the Board of Directors during the
fiscal year ended May 31, 1996, are listed above. The Committee is composed
solely of non-employee directors. Mr. Jaqua serves as Secretary of the
Company, but is not an employee. During the fiscal year, the Company paid
Harbor Point Associates, Inc., of which director Ralph D. DeNunzio is
President, $100,000 for financial consulting services, and paid Robanna, Inc.,
which is owned by director John R. Thompson, Jr., $350,000 for services
rendered pursuant to an endorsement contract. The Company expects to pay Mr.
DeNunzio or his firm, and Mr. Thompson or his firm for additional consulting
work that may be performed by them for the Company during fiscal 1997.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

An agreement between the Company and President and Chief Operating Officer,
Dr. Thomas E. Clarke, contains a covenant not to compete that extends for one
year following the termination of Dr. Clarke's employment with the Company.
The agreement provides that if Dr. Clarke voluntarily resigns, the Company
will make monthly payments to him during the one-year noncompetition period in
an amount equal to one-half of Dr. Clarke's last monthly salary. The agreement
provides further that if Dr. Clarke's employment is terminated by the Company,
the Company will make monthly payments to him during the one-year
noncompetition period in an amount equal to Dr. Clarke's last monthly salary.
The Company may unilaterally waive the covenant not to compete. 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.

20
<PAGE>

The Company has a similar agreement with Vice President Mark G. Parker that
extends from one year following the termination of Mr. Parker's employment
with the Company. The agreement provides that if Mr. Parker voluntarily
resigns, the Company will make monthly payments to him during the one-year
noncompetition period in an amount equal to the greater of (i) $20,833 or (ii)
one-twenty-fourth of the total salary and bonuses received by Mr. Parker
during the 12-month period immediately preceding his resignation. The
agreement provides further that if Mr. Parker's employment is terminated by
the Company, the Company will make monthly payments to him during the one-year
noncompetition period in an amount equal to the greater of $41,667 or
(ii) one-twelfth of the total salary and bonuses received by Mr. Parker during
the 12-month period immediately preceding his termination. 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.

CERTAIN TRANSACTIONS

During the fiscal year ended May 31, 1996, the Company paid the law firm of
Bullivant, Houser, Bailey, Pendergrass & Hoffman, of which director Douglas G.
Houser is a partner, approximately $36,840 for services rendered. During the
same period, the Company paid Harbor Point Associates, Inc., of which director
Ralph D. DeNunzio is President, $100,000 for financial consulting services,
and paid Robanna, Inc., which is owned by director John R. Thompson, Jr.,
$350,000 for services rendered pursuant to an endorsement contract. The
Company expects to pay Mr. Houser, or his law firm, Mr. DeNunzio, or his firm,
and Mr. Thompson, or his firm, for additional legal and consulting services
that may be performed by them for the Company during fiscal year 1997.

INDEBTEDNESS OF MANAGEMENT

In 1994 the Company loaned $500,000 at 5.65% per annum to President Thomas
E. Clarke for the purchase of a second home. The loan is secured by the second
home, and must be repaid within 180 days following termination of employment.
As an inducement to remain employed by the Company, the Company has agreed to
forgive $100,000 of the loan commencing January 1, 2000 and on each of the
four anniversary dates thereafter, provided that Dr. Clarke remains employed
by the Company.

21
<PAGE>

PROPOSAL 2

RATIFICATION OF INDEPENDENT ACCOUNTANTS

The Board of Directors of the Company, upon recommendation of its Audit
Committee, has appointed Price Waterhouse as independent accountants to
examine the Company's consolidated financial statements for the fiscal year
May 31, 1997 and to render other professional services as required.

The appointment of Price Waterhouse is being submitted to shareholders for
ratification.

Price Waterhouse has served as independent accountants to the Company since
1971. Representatives of Price Waterhouse will be present at the Annual
Meeting and are expected to be available to respond to questions.

PROPOSAL 3

The General Board of Pension and Health Benefits of the United Methodist
Church, of 1201 Davis Street, Evanston, Illinois 60201, a holder of 61,700
shares of NIKE, Inc. Class B Common Stock, submitted the following resolution
for the reasons stated:

"WHEREAS, the image of Nike Incorporated is an extremely important corporate
asset--recently valued at between $1.3 and 1.7 billion by authoritative
Trademarks and Licensing Associates--assuring continued strong performance of
our brand in an intensely competitive market.

There are persistent reports of exploitative conditions and military
suppression of workers' legitimate protests at shoe factories near Jakarta,
Indonesia.

The Indonesian Legal Aid Institute reports that nearly 70 workers are
currently struggling for reinstatement and back-pay settlements with NIKE
contractors as a result of their courageous efforts to get those contractors
to pay a living wage, treat workers with respect and bargain collectively with
genuine workers' representatives. The case of 24 workers who made Nike shoes
is now before the Supreme Court of Indonesia.

Corporations, sourcing from dozens of contractors, have begun to recognize
their responsibility to protect workers from harsh management practices and
denials of their basic rights.

22
<PAGE>

Nike's retention of Ernst and Young to monitor contractors' compliance with
Indonesian wage regulations is an indication of the difficulty our company
faces in speaking with certitude about only one of the provisions of the Code
of Conduct.

That code is supplemented by the Athletic Footwear Association's "Guidelines
on Business Practices of Business Partners"--signed by Nike on 9/3/93--which
call for the observation of the right of free association, fair compensation
and the prohibition of corporal punishment and mental or physical coercion.

Consumers must rely on the good faith of corporations such as ours which
pledge to observe production guidelines intended to guarantee that fair
treatment of employees is monitored with integrity and in a consistent manner.

BE IT RESOLVED, THAT the shareholder request the Board of Directors to
review compliance with the Nike Code of Conduct & "Memorandum of
Understanding" with contractors concerning the company's "commitment to
people, communities and the environment". We encourage Nike management to take
under advisement the following recommendations:

1. Research conducted by Indonesian non-governmental organizations in
direct contact with employees who make Nike shoes.

2. Establishing independent monitoring and enforcement mechanisms in
conjunction with non-governmental organizations.

3. Strengthening of internal monitoring procedures.

4. Translating the Nike "Code of Conduct" and "Memorandum of
Understanding" into the languages of employees where Nike has
international contracts, and to distribute these documents to suppliers.

5. Utilizing positive influence to encourage suppliers to adhere to NIKE
standards of conduct.

A summary of the review should be made available to shareholders by April,
1997."

23
<PAGE>

MANAGEMENT'S RESPONSE:

The Board of Directors recommends that shareholders vote AGAINST Proposal 3.

We at NIKE empathize with workers in any industry who may be treated
unfairly. As the shareholder resolution correctly observes, some years ago
NIKE established labor standards in order to regulate and improve working
conditions of Indonesian footwear factory subcontractors. Without a doubt,
NIKE endeavors to possess the highest business ethics. Our shareholders expect
nothing less from the industry leader.

This shareholder proposal, however, is directed toward monitoring compliance
with NIKE's labor standards. Although well-intentioned, the Board of Directors
believes the Proposal is unnecessary in that NIKE's management has for years
utilized careful monitoring procedures that have proven effective, and NIKE
continues to enhance and strengthen enforcement of its labor standards with
new initiatives.

Putting aside any misleading media accounts and unfair attacks, here are the
facts:

. NIKE footwear subcontractors in Indonesia pay above the minimum wage of
126,500 rupiah per month as required by law, and actually pay an average
wage of 240,000 rupiah per month (including non-compulsory overtime, which
pays double the rate). In addition, employees are provided with paid
holidays, free meals, free health care, transportation subsidies, lodging,
and bonuses for improved skills. These benefits add an estimated 20-25% to
wages. These are among the most sought-after factory jobs in the industry,
because of the pay scale and good working environment. In fact, an entry-
level Indonesian factory employee with no skills earns five times the
average income of a farmer (before any government subsidies). In the six
years that NIKE has subcontracted production in Indonesia, the minimum wage
has been increased 13 times. Due in part to NIKE and other multinational
corporations, real wages in Indonesia have risen 55 percent since 1990.

. Each of NIKE's footwear subcontractors has signed NIKE's Memorandum of
Understanding and Code of Conduct, which prohibit, among other things,
forced or prison labor, and require subcontractors to comply with all local
and national laws regulating child labor, the minimum wage, overtime pay,
benefits, insurance, occupational safety, and environmental safety. NIKE
requires these documents to be translated into the native language and
publicly posted in every building.

. NIKE monitors and enforces compliance with the Memorandum and Code of
Conduct with over 800 NIKE employees, many of them U.S. citizens, who live
and work right

24
<PAGE>

at the factories worldwide. In addition to production assistance and quality
control, they are required to ensure compliance with NIKE's labor standards.
These are dedicated people who know that the only way to produce a high
quality product is to assure that factory employees are treated well.

. In 1994 NIKE engaged the services of Ernst & Young, an independent
international auditing firm, to randomly audit NIKE's Indonesian footwear
subcontractors for compliance with NIKE's Memorandum and Code of Conduct, and
ensure that employees are receiving the required pay and benefits, and to
find out how they like working in the facility. Any subcontractor found not
in compliance is required immediately to implement a plan of corrective
action. NIKE does not tolerate unethical business partners. Ernst & Young has
a solid reputation of thorough and unbiased oversight of manufacturing
operations in developing countries. To say that unspecified "non-governmental
organizations" could do a better job ignores this reality and the size of the
task.

. In fact, the incident to which the shareholder proposal refers regarding 24
factory employees occurred in 1992, before NIKE engaged Ernst & Young to
audit subcontractors. The employees' legal action does not involve NIKE, but
is instead against the Indonesian Department of Manpower which authorized the
dismissal of the employees. The case is on appeal. The Minister of Manpower
found that the employees inflicted illegal and extensive damage to factory
property.

. Over the past 20 years NIKE has established long-term relationships with
select subcontractors, and management believes that NIKE's high standards of
business ethics and corporate responsibility have, and will continue to,
influence that of our partners.

But just like a competitive athlete, an industry leader never rests on its
laurels. Enforcement is a continuing process. NIKE has proceeded to strengthen
and improve monitoring of NIKE's labor standards in the following ways:

. NIKE was recently invited by the Clinton Administration to join a coalition
of select footwear and apparel manufacturers, retailers, labor
representatives, and human rights groups to develop strategies to assure
consumers that the products they purchase are produced under acceptable labor
conditions.

. NIKE is in the process of establishing a high-level corporate compliance
position charged solely with monitoring adherence to NIKE's labor standards.

25
<PAGE>

. NIKE has extended formal invitations to the U.S. Secretary of State and the
U.S. Ambassador to Indonesia to visit NIKE's contracted facilities, and has
welcomed members of the press, and other agencies and organizations,
including senior U.S. State Department officials.

. NIKE has joined Business for Social Responsibility to learn how other
industries have addressed monitoring and compliance issues.

The Board of Directors believes that NIKE has addressed each of the
Proposal's concerns. NIKE's procedures for monitoring Indonesian
subcontractors are extensive and effective. Given NIKE's record of leadership,
proven monitoring system, and additional steps scheduled to be taken in the
coming months, NIKE has addressed monitoring more effectively than the
Proposal could, and without consuming the valuable time and funds of NIKE and
its shareholders to micro-manage one aspect of one country's operations.
Assuring that NIKE's subcontractors treat their employees with dignity and
respect is not a new idea at the Company. It is something that NIKE has
insisted on for years.

Accordingly, the Board of Directors recommends that shareholders vote
AGAINST Proposal 3.

Holders of Class A Stock and Class B Stock will vote together as a single
class on Proposal 3. If a quorum is present at the Annual Meeting, Proposal 3
will be approved if the number of shares voted in favor of the proposal
exceeds the number of shares voted against the proposal. Abstentions and
broker non-votes are counted for purposes of determining whether a quorum
exists, but are not counted as voting either for or against and therefore have
no effect on the results of the vote.

SHAREHOLDER PROPOSALS

A proposal by a shareholder for inclusion in the Company's proxy statement
and form of proxy for the 1997 annual meeting of shareholders must be received
by NIKE at One Bowerman Drive, Beaverton, Oregon 97005-6453, Attention: John
F. Coburn III, Assistant General Counsel of NIKE, on or before April 14, 1997
in order to be eligible for such inclusion.

26
<PAGE>

OTHER MATTERS

As of the time this proxy statement was printed, management was unaware of
any proposals to be presented for consideration at the Annual Meeting other
than those set forth herein, but if other matters do properly come before the
Annual Meeting, the persons named in the proxy will vote the shares
represented by such proxy according to their best judgment. The Company's
bylaws prescribe that a shareholder may bring matters before an annual meeting
only if such shareholder has given the Company advance written notice of such
matters. For purposes of the 1996 Annual Meeting, such notice must be received
60 days before the meeting by John F. Coburn III. Assistant General Counsel of
NIKE, at One Bowerman Drive, Beaverton, Oregon 97005-6453.

A COPY OF NIKE'S 1996 ANNUAL REPORT ON FORM 10-K WILL BE AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON REQUEST TO: INVESTOR RELATIONS, NIKE, INC.,
ONE BOWERMAN DRIVE, BEAVERTON, OREGON 97005-6453.

For the Board of Directors

JOHN E. JAQUA
Secretary

27
<PAGE>

NOTICE OF ANNUAL
MEETING
AND
PROXY STATEMENT
---------------------

SEPTEMBER 16, 1996
BEAVERTON, OREGON
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[RECYCLED LOGO]

This proxy statement is printed on recycled paper

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P
NIKE, INC.
R
CLASS A COMMON STOCK PROXY
O
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE 1996 MEETING OF SHAREHOLDERS--SEPTEMBER 16, 1996

The undersigned hereby appoints Philip H. Knight, Thomas E. Clarke and Douglas
G. Houser, and each of them, proxies with full power of substitution, to vote,
as designated below, on behalf of the undersigned all shares of Class A Common
Stock which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders of NIKE, Inc. on September 16, 1996, and any adjournments thereof,
with all powers that the undersigned would possess if personally present. A ma-
jority of the proxies or substitutes present at the meeting may exercise all
powers granted hereby.

Election of Directors, Nominees: (change of address/comments)
Ralph D. DeNunzio; Richard K. Donahue;
Douglas G. Houser; John E. Jaqua; ----------------------------
Philip H. Knight; Kenichi Ohmae; ----------------------------
Ralph A. Pfeiffer, Jr.; Charles W. Robinson; ----------------------------
Michael Spence; John R. Thompson, Jr. ----------------------------

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH SEE
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. REVERSE
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS SIDE
CARD.

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Please mark your
X votes as in this 9317
example. ----

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED, BUT IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR, FOR PROPOSAL 2, AND AGAINST PROPOSAL 3. THE PROXIES MAY
VOTE IN THEIR DISCRETION AS TO OTHER MATTERS WHICH MAY COME BEFORE THE MEETING.

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE THE BOARD OF DIRECTORS
FOR PROPOSAL 2. RECOMMENDS A VOTE AGAINST
PROPOSAL 3.
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1. Election of Directors FOR WITHHELD
(see reverse) [_] [_]

For, except vote withheld from
the following nominee(s):

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2. Proposal to ratify the FOR AGAINST ABSTAIN
appointment of Price
Waterhouse as independent
accountants. [_] [_] [_]

3. Shareholder Proposal regarding
certain monitoring procedures
for subcontract manufacturers
in Indonesia. [_] [_] [_]

Mark here for address change
and note on reverse side. [_]

SIGNATURE(S) _______________________DATE ______________________________________
(Please date and sign above exactly as your name or names appear hereon. Joint
owners should each sign personally. Corporate proxies should be signed in full
corporate name by an authorized officer and attested. Persons signing in a fi-
duciary capacity should indicate their full titles in such capacity.)
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P
NIKE, INC.
R
CLASS B COMMON STOCK PROXY
O
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE 1996 MEETING OF SHAREHOLDERS--SEPTEMBER 16, 1996

- --------------------------------------------------------------------------------
Please mark your
X votes as in this 9316
example. ----

1. Election of Directors FOR WITHHELD
(see reverse) [_] [_]

For, except vote withheld from
the following nominee(s):

- ------------------------------

2. Proposal to ratify the FOR AGAINST ABSTAIN
appointment of Price
Waterhouse as independent
accountants. [_] [_] [_]

3. Shareholder Proposal regarding
certain monitoring procedures
for subcontract manufacturers
in Indonesia. [_] [_] [_]

Mark here for address change
and note on reverse side. [_]

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[LOGO]

Admission Ticket
NIKE, Inc. Annual Meeting of Shareholders
Monday, September 16, 1996 at 10 a.m.
Registration at 9:30

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[LOGO]

NIKE World Campus, One Bowerman Drive, Beaverton, Oregon

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TO OUR SHAREHOLDERS

One of the difficulties we have had in responding to our critics
on the issue of labor practices in developing countries has been
the moving target of the criticisms. We respond in one area; they
attack in another, somewhat related area.

So I decided to try to categorize these criticisms here in one
space, and tell you how I see us measuring up.

WHY ON EARTH DID NIKE EVER PICK SUCH A TERRIBLE PLACE AS INDONESIA
TO HAVE SHOES MADE?

Effectively the U.S. State Department asked us to.

In 1976, when 90 percent of NIKE's production was in Taiwan and Korea,
Secretary of State Cyrus Vance asked Charles Robinson, who had been
Deputy Secretary of State in the Ford Administration, to start the
U.S.-ASEAN Business Council to fill the vacuum left by the withdrawal
of the American military from that part of the world. Secretary Vance
wanted to fill that void with a stronger American business presence.

Chuck Robinson accepted the challenge, put together the council and
served as Chairman of the U.S. side for three years. Mr. Robinson
was a NIKE Board member at that time as he is today. NIKE was one
of the 75 U.S. Charter Members of the Council.

"NIKE's presence in that part of the world," according to a senior
state department official at that time, "is American foreign policy
in action."

In 1995, in a step which I felt was a great confirmation of Cyrus Vance's
vision and a very positive step toward stability in the region, the
Democratic Republic of Vietnam joined ASEAN.

Today the ASEAN countries are among the world leaders In the rate of
economic growth . In fact, the United Nations Human Development Report
1996 characterized Indonesia as "the most sustainable and widespread
development miracle of the 20th Century, perhaps of all history."

WHY DOES NIKE ALLOW ITS SHOES TO BE MADE IN SWEATSHOPS?

The NIKE sweatshop in Indonesia has a dormitory for the single workers
in need of housing, has a cafeteria to feed 2,000 people, and its average
pay is about double the minimum wage. It also has two acres of gardens and
two outdoor basketball courts. Nice definition of sweatshop.

ACTIVIST GROUPS HAVE CALLED FOR MONITORING OF THESE OVERSEAS MANUFACTURING
OPERATIONS. WHAT'S YOUR OPINION ABOUT DOING SOMETHING LIKE THAT AT NIKE?

NIKE has had monitors in all its factories for 23 years. Today we have
a staff of 800 in Asia working with our subcontractors on a daily basis,
checking for quality control and adherence to our Code of Conduct for
factories. For the past 18 months, we have hired Ernst and Young to
conduct unannounced audits to ensure adherence to our Code of Conduct.

WHAT ABOUT INDEPENDENT MONITORING BY SOMEONE OTHER THAN ERNST & YOUNG?

Within the next year we will invite a group other than Ernst & Young to
review the factories that make NIKE shoes. We know these are the best
shoe factories in the world, and we will encourage this independent group
to make its finding public.

In addition, as we went to press on this letter, the Clinton Administration
invited NIKE to join a coalition of footwear and apparel manufacturers,
retailers, human rights groups and labor representatives to develop
strategies to assure consumers that the items they purchase are produced
under acceptable labor conditions. We are always willing to engage in
constructive dialogue and hope this effort can lead to improved labor
conditions around the world.

NIKE MAKES MUCH OF ITS CODE OF CONDUCT WHICH FORBIDS EMPLOYMENT OF UNDERAGE
WORKERS, YET WITHIN THE LAST YEAR AN UNDERAGE WORKER WAS FOUND MAKING NIKE
SHOES IN AN INDONESIAN FACTORY. DOESN'T THIS MAKE THE CODE OF CONDUCT
MEANINGLESS?

An Ernst & Young audit did uncover one underage worker out of 120,000
Indonesian workers involved in NIKE subcontracted production. You have to
be 18 to join the U.S. Army, but occasionally underage people lie their way
in. Our subcontractors require birth documentation of workers in Indonesia.
In a few instances we have found forged documents, but our own reviews, as
well as Ernst & Young's, have shown that the Code is complied with in all
material terms.

Secondly, the working conditions and rate of pay have made these jobs among
the best in the country. We have hundreds and sometimes thousands of
applicants for every job opening. There is clearly no need, as well as no
desire, to hire any underage worker.

WE HEAR THAT FOREMEN BEAT UP THE WORKERS IN INDONESIAN FACTORIES.

We have heard those reports too, and over the years we've seen some tactics -
like blowing whistles in workers' ears - that we found offensive, and we've
used our influence to correct those situations.

Though our critics make much of patterns of abuse, the documented instances
of managers abusing their authority are few, and NIKE inspectors deal with
the situations immediately.

For instance, when a manager in Indonesia struck a worker in 1994, he was
dismissed within one day. Recently in Vietnam, a female Korean line
supervisor hit a Vietnamese line worker with her hat. Although the worker
was not injured, NIKE and its subcontractor found the behavior unacceptable,
and the supervisor was dismissed. She remains in Vietnam, however, pending a
legal hearing on the case.

NIKE has a vast manufacturing network. Problems are bound to occur from time
to time. That is why we have NIKE staff members in these facilities on a
daily basis, and we verify our findings through independent, outside audit.
NIKE does not run from problems. To the contrary, we are believers in
constructive engagement. When problems to occur, we deal wit them quickly and
effectively. If abusive practices continue, we do not hesitate to terminate
the business relationship.

DIDN'T LIFE MAGAZINE SHOW CASES WHERE UNDERAGE WORKERS STITCHED NIKE SOCCER
BALLS UNDER DEPLORABLE CONDITIONS IN PAKISTAN?

We placed our first order for 40,000 soccer balls in 1996 through one new
subcontractor. That is one tenth of one percent of the balls exported from
a country where balls have been made for decades.

When our inspectors flew into Pakistan they didn't like what they saw any
better than Sidney Schanberg who wrote the article for LIFE.

The problem is the nature of the cottage industry in Pakistan. Ball
stitching is farmed out all over the countryside making it virtually
impossible to control. So the balls are stitched under every imaginable
condition - family huts, open air workshops, sweatshop dungeons - by people
of every age.

Within one month of that inspection we sat down with our subcontractor and
reached agreement under which, starting this fall, NIKE balls will be
stitched in centralized stitching rooms where we can see for ourselves that
no underage workers are employed.

Within one month after that agreement was reached the LIFE article appeared.
Soon after that, our good friends at Reebok announced a stitching policy
similar to NIKE's. Effectively, NIKE and Reebok are changing abusive
conditions that have existed in Pakistan for decades.

WHY PUT YOURSELF THROUGH ALL THIS? WHY DON'T YOU JUST SAY YOUR SHOES ARE
MADE BY FOREIGN-SOURCE FACTORIES, NOT BY YOU?

We have a fairly sophisticated process which can't properly be described in
a few paragraphs. Essentially we work with Asian partners - not partners
in the legal sense but in an emotional sense. When a country outgrows the
shoe industry, we do not abandon years of factory management and strong
relationships. The entities go with us to make shoes somewhere else.

While we do not have 100 percent control over these factories, we clearly
have strong influence and do not try to hide behind the ownership issue.
And, yes, we have broken off relationships where proper standards were not
maintained.

ANYTHING ELSE?

As Columbo would say, "Just one more thing."

I have been absolutely astonished by the reaction of certain print media over
the events of this summer. It has basically and uniformly said, "Don't confuse
me with the facts I have a sensationalist sound bite." In the end, I believe
this issue is much more a significant statement about the media and its
approach to truth than it is a statement about NIKE.

I can't get out of my mind a meeting with the Editorial Board of The New
York Times. After it had published three scathing columns on the low wages
in factories making NIKE shoes in Indonesia, their first question was, "What
do you pay those people anyway?"

Three columns ripping us on pay before they asked us what the pay is. Oh
well.

WHAT HAVE YOU LEARNED FROM ALL THIS?

Among other things, that my own attitude has been detrimental to getting our
story out.

I have seen enormous progress in the quality of working conditions in Asian
factories over the past 30 years. In addition, we are miles ahead in terms
of establishing standards and monitoring them compared to most of the other
importers.

While all of this is true, we can be a lot better. NIKE likes being held to
a higher standard.

One great positive of the debate has been a shrinking Pacific moat. Media
and the public alike recognize the interlocking nature of trade and
communications. From the white wooden and brick house on Southeast
Claybourne where, for me, it all began, to the cardboard houses around
Guangzhou. From the Gate of Heavenly Peace, raw octopus and fish stomach,
to Chevys and Tootsie Pops. Across this grand spectrum of strange customs
and unique thoughts, comes one conclusion above all others: we are all in
this together.

And through the very uneven process of this current debate, not only will
NIKE get better, so will a lot of others.

/s/ Philip H. Knight
Chairman of the Board
and Chief Executive Officer