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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 10, 1996
NIKE, INC.
-----------------------------------
(Exact Name of Registrant as Specified in Charter)
Oregon 1-10635 93-0584541
- ---------------------------- ------------------------ -------------------
(State or other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
One Bowerman Drive, Beaverton, Oregon 97005
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(Address of Principal Executive Offices) (Zip Code)
(503) 671-6453
--------------
(Registrant's telephone number, including area code)
____________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On November 12, 1996, NIKE, Inc. (the "Company") filed a Registration
Statement on Form S-3 (File No. 333-15953), as amended by Amendment No.1 thereto
filed on November 26, 1996 (collectively, the "Registration Statement"),
relating to the registration under the Securities Act of 1933, as amended, of up
to $500 million aggregate principal amount of the Company's debt securities.
The Registration Statement was declared effective on November 29, 1996.
On December 10, 1996, the Company entered into a Pricing Agreement (a
copy of which is attached hereto as Exhibit 1.1) with Goldman, Sachs & Co.,
Salomon Brothers Inc, Lehman Brothers Inc., and Merrill Lynch, Pierce Fenner &
Smith Incorporated (collectively, the "Underwriters") pursuant to which the
Company agreed to issue and sell and the Underwriters agreed, subject to certain
conditions, to purchase $200 million aggregate principal amount of 6-3/8% Notes
Due December 1, 2003 (the "Notes") at a purchase price of $197,900,000 plus
accrued interest from December 1, 1996.
In connection with the issuance of the Notes on December 13, 1996,
pursuant to an Indenture among the Company and The First National Bank of
Chicago (the form of which was filed as an exhibit to the Registration
Statement), the Company delivered an Officers' Certificate (the form of which is
attached hereto as Exhibit 4.1) setting forth the terms of the Notes.
Item 7. Financial Statements, Pro Forma Financial Information and
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Exhibits.
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(c) The following exhibits are filed as part of this Report:
1.1 Pricing Agreement dated December 10, 1996 among NIKE, Inc. and
Goldman, Sachs & Co., Salomon Brothers Inc, Lehman Brothers Inc.,
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, together
with Underwriting Agreement Terms and Conditions but excluding
Annex II.
4.1 Officers' Certificate pursuant to the Indenture, dated as of
December 13, 1996, between NIKE, Inc. and The First National Bank
of Chicago, as Trustee, setting forth the terms of NIKE, Inc.'s
Notes entitled "6-3/8% Notes Due December 1, 2003" (the "Notes"),
without annexes.
4.2 Form of Note.
12.1 Computation of Ratio of Earnings to Fixed Charges.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 16, 1996
NIKE, Inc.
By: /s/ Robert S. Falcone
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Name: Robert S. Falcone
Title: Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
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1.1 Pricing Agreement dated December 10, 1996 among NIKE, Inc. and
Goldman, Sachs & Co., Salomon Brothers Inc, Lehman Brothers Inc., and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, together with
Underwriting Agreement Terms and Conditions but excluding Annex II.
4.1 Officers' Certificate pursuant to the Indenture, dated as of December
13, 1996, between NIKE, Inc. and The First National Bank of Chicago,
as Trustee, setting forth the terms of NIKE, Inc.'s Notes entitled
"6-3/8% Notes Due December 1, 2003" (the "Notes"), without annexes.
4.2 Form of Note.
12.1 Computation of Ratio of Earnings to Fixed Charges.
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Exhibit 1.1
NIKE, INC.
DEBT SECURITIES
______________________________________
PRICING AGREEMENT
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Goldman, Sachs & Co.,
Salomon Brothers Inc,
Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
December 10, 1996
Ladies and Gentlemen:
NIKE, Inc., an Oregon corporation (the "Company"), proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement Terms and
Conditions attached hereto as Annex I (the "Underwriting Agreement") to issue
and sell to you (the "Underwriters") in the amounts set forth on Schedule I
hereto the Securities specified in Schedule II hereto (the "Designated
Securities"). Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the
addresses of the Representatives referred to in such Section 12 are set forth at
the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement Terms and Conditions (which document is hereby expressly
incorporated herein by reference in its entirety; all references therein to
"this Agreement," the "Underwriting Agreement" or the "Pricing Agreement" shall
be deemed to refer to this Pricing Agreement, all references therein to "the
date of this Agreement" shall be deemed to refer to the date of this Pricing
Agreement and the term "heretofore" as used therein shall mean prior to the date
of this Pricing Agreement), the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at the purchase price to
the Underwriters set forth in Schedule II hereto, the principal amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
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If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
NIKE, Inc.
By: ________________________________
Name: Robert Falcone
Title: Vice President and
Chief Financial Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Salomon Brothers Inc
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: ____________________________________
(Goldman, Sachs & Co.)
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SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
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<S> <C>
Goldman, Sachs & Co..................... $ 60,000,000
Salomon Brothers Inc.................... 60,000,000
Lehman Brothers Inc..................... 40,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................ 40,000,000
------------
Total.............................. $200,000,000
============
</TABLE>
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SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
6 3/8% Notes due December 1, 2003
AGGREGATE PRINCIPAL AMOUNT:
$200,000,000
PRICE TO PUBLIC:
99.575% of the principal amount of the Designated Securities, plus accrued
interest from December 1, 1996
PURCHASE PRICE BY UNDERWRITERS:
98.950% of the principal amount of the Designated Securities, plus accrued
interest from December 1, 1996
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to
be made available for checking by the Representatives at least twenty-four
hours prior to the Time of Delivery.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds
TIME OF DELIVERY:
10:00 a.m. (New York City time), December 13, 1996
INDENTURE:
Indenture, dated December 13, 1996, between the Company and The First
National Bank of Chicago, as Trustee
MATURITY: December 1, 2003
INTEREST RATE:
6 3/8%
INTEREST PAYMENT DATES:
June 1 and December 1 of each year, commencing June 1, 1997
REDEMPTION PROVISIONS:
The Designated Securities are subject to redemption, in whole or in part,
at the option of the Company, at any time, at a redemption price equal to the
greater of (i) 100% of the principal amount of such Securities or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon, discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (determined on the third Business Day preceding such redemption
date), plus, in each case, accrued and unpaid interest thereon to the redemption
date.
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"Adjusted Treasury Rate" means the arithmetic mean of the yields under the
heading "Week Ending" published in the Statistical Release most recently
published prior to the date of determination under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the redemption date, of
the principal being redeemed. If no maturity set forth under such heading
exactly corresponds to the maturity of such principal, yields for the two
published maturities most closely corresponding to the maturity of such
principal shall be calculated pursuant to the immediately preceding sentence,
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of the relevant periods to the
nearest month.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively-traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination pursuant to the terms of the
Designated Securities, then such other reasonably comparable index which shall
be designated by the Company.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Designated Securities
to be redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the Designated
Securities or portions thereof called for redemption.
SINKING FUND PROVISIONS:
No sinking fund provisions
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Latham & Watkins
505 Montgomery Street
San Francisco, CA 94111
NAMES AND ADDRESSES OF REPRESENTATIVES:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
II-2
<PAGE>
ANNEX I
Underwriting Agreement Terms and Conditions
To the Representatives of the
several Underwriters named in the
Pricing Agreement hereinafter
described.
Ladies and Gentlemen:
From time to time NIKE, Inc., an Oregon corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") and, subject to the terms and conditions stated herein and therein,
to issue and sell to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with respect to such
Pricing Agreement and the securities specified therein) certain of its debt
securities (the "Securities") specified in Schedule II to such Pricing Agreement
(with respect to such Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of facsimile or telegraphic communications. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
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(a) A registration statement on Form S-3 (File No. 333-15953) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement, as amended, and any post-effective
amendment thereto, each in the form heretofore delivered or to be delivered
to the Representatives and, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus included therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, and other than those documents referred to
above in this Section 2(a), no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form heretofore
delivered to the Representatives); and no stop order suspending the
effectiveness of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by
the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the registration statement at the
time such part of the registration statement became effective but excluding
the statement of eligibility of the trustee on Form T-1, each as amended at
the time such part of the registration statement became effective or such
part of the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be as of the
date of such amendment or supplement; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to and include the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) of the rules and regulations of
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<PAGE>
the Commission under the Act and in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder;
(c) The Registration Statement and the Prospectus conform in all
material respects to the requirements of the Act and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder; the Registration Statement, as
amended, does not and will not, as of the applicable effective date of the
Registration Statement and any amendment thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus does not and will not as of the applicable
filing date of the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(d) Neither the Company nor any of its significant subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Significant Subsidiary")) has sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any decrease
in the capital stock of the Company or any of its Significant Subsidiaries
(other than as required pursuant to any stock repurchase plan that has been
disclosed or incorporated by reference in the Prospectus) or an increase in
the consolidated long-term debt of the Company in excess of $10 million or
any material adverse change, or any development involving a prospective
material adverse change, in the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries (a "Material Adverse Change"), otherwise than as set forth
in or contemplated by the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Oregon, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth or
incorporated by reference in the Prospectus, and all of the issued shares
of capital stock of the
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<PAGE>
Company have been duly and validly authorized and issued and are fully paid
and non-assessable;
(g) The Designated Securities have been duly authorized, and, when
issued and delivered pursuant to this Agreement and the Pricing Agreement,
such Designated Securities will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit to
the Registration Statement; the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and, at the Time of Delivery for
such Designated Securities (as defined in Section 4 hereof), the Indenture
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Indenture conforms and the Designated Securities will conform in all
material respects to the descriptions thereof contained in the Prospectus
as amended or supplemented with respect to such Designated Securities;
(h) The issue and sale of the Designated Securities, the compliance
by the Company with all of the provisions of the Designated Securities, the
Indenture, this Agreement and any Pricing Agreement, and the consummation
of the transactions herein and therein contemplated will not (i) conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, (ii) result in any violation of the
provisions of the Articles of Incorporation or By-laws of the Company or
(iii) result in the violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its properties, in each case (i) or (iii) above
other than such breaches, conflicts, violations or defaults which,
individually or in the aggregate, (x) would not have a material adverse
effect on the Company and its subsidiaries taken as a whole and (y) would
not affect the validity, performance or consummation of the transactions
contemplated by this Agreement; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the Indenture,
except (x) such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and the Trust Indenture Act, (y) such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters and (z)
such consents, approvals, authorizations, orders, registrations or
qualifications which (individually or in the aggregate) the failure to
make, obtain or comply with (a) would not have a material adverse effect on
the Company and its subsidiaries taken as a whole and (b) would not affect
the validity, performance or consummation of the transactions contemplated
by this Agreement or the Indenture;
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<PAGE>
(i) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes", insofar as
they purport to constitute a summary of the terms of the Securities,
conform in all material respects to the rights set forth in the instruments
defining the same;
(j) Neither the Company nor any of its Significant Subsidiaries is in
violation of its Certificate or Articles of Incorporation, as applicable,
or By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound, except for such defaults that would not reasonably be
expected to result in a Material Adverse Change to the Company or such
Significant Subsidiary, as the case may be;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Significant Subsidiaries is a party or of which any property of the Company
or any of its Significant Subsidiaries is the subject which, if determined
adversely to the Company or any of its Significant Subsidiaries, would
individually or in the aggregate reasonably be expected to result in a
Material Adverse Change to the Company and its subsidiaries taken as a
whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(l) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(n) Other than as set forth in the Prospectus, the Company and its
subsidiaries own or have valid, binding, enforceable licenses or other
rights to use any patents, trademarks, trade names, service marks, service
names, copyrights, and other proprietary intellectual property rights
("Intellectual Property") necessary to conduct the business of the Company
and its subsidiaries in the manner in which it has been and is being
conducted, without any conflict with the rights of others, except for such
conflicts as do not and would not reasonably be expected to result in a
Material Adverse Change to the Company and its subsidiaries, taken as a
whole; the information contained or incorporated by reference in the
Registration Statement and Prospectus concerning patents issued to, or
patent applications filed on behalf of, the Company and its subsidiaries is
accurate in all material respects; and, except as described in the
Prospectus, neither the Company nor any of its subsidiaries has received
any notice from any other person of infringement of or conflict with (and
knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intellectual Property or any trade secrets,
proprietary information, know-how, processes and procedures owned or used
by or licensed to the Company or any of its subsidiaries,
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<PAGE>
which if determined adversely to the Company or any of its subsidiaries
would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change to the Company and its subsidiaries, taken as
a whole.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
thereof, the several Underwriters propose to offer such Designated Securities
for sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in the funds
specified in such Pricing Agreement, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus, and any applicable amendments and
supplements thereto, in relation to the applicable Designated Securities in a
form approved by the Representatives and to file such Prospectus pursuant to,
and within the time required by, the appropriate subsection of Rule 424(b) under
the Act; to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the Pricing
Agreement relating to such Securities and prior to the Time of Delivery for such
Securities which shall be reasonably disapproved by the Representatives for such
Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Securities, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any jurisdiction, of
the initiation or, to the best knowledge of the Company, threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amendment or supplement of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
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<PAGE>
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Designated Securities for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Designated Securities; provided, however, that
in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) The Company shall use its reasonable best efforts to furnish the
Underwriters, prior to 12:00 noon New York City time, on the Business Day next
succeeding the date of the Pricing Agreement for such Designated Securities with
copies of the Prospectus in New York City as amended or supplemented in such
quantities as the Representatives may reasonably request (provided that the
Representatives have made available to the Company or the Company's financial
printer such names, addresses and quantities at least one Business Day prior to
the date of the Pricing Agreement), and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of such Designated
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify the Representatives and to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of any such amended Prospectus or any such supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158); and
(e) During the period beginning from the date of the Pricing Agreement for
such Designated Securities and continuing to and including the Time of Delivery
for such Designated Securities or, if the Representatives have notified the
Company in writing prior to such Time of Delivery that the trading restrictions
for such Designated Securities have not terminated, such later date as the
Representatives shall notify the Company in writing of the termination of such
trading restrictions, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities
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<PAGE>
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing, producing or reproducing any Agreement among Underwriters, this
Agreement, any Pricing Agreement, any Indenture, any Blue Sky and legal
investment memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including any reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and legal investment surveys; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of any Trustee and any agent of any
Trustee and the fees and disbursements of counsel for any Trustee in connection
with any Indenture and the Securities; and (vii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Act within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or, to the best of their knowledge, threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of each
such opinion is attached as Annex II(a) hereto), dated the Time of Delivery
for such Designated Securities, with respect to the incorporation of the
Company, the Indenture, the Designated Securities, the Registration
Statement, the Prospectus as amended or supplemented and such other related
matters as the Representatives may reasonably
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<PAGE>
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(c) Latham & Watkins, counsel for the Company, shall have furnished
to the Representatives their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated the Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Indenture is the legally valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms.
(ii) The Designated Securities, when executed and authenticated
in accordance with the terms of the Indenture and delivered to and
paid for by you in accordance with the terms of this Agreement, will
be legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
(iii) The Indenture has been duly qualified under the Trust
Indenture Act.
(iv) The issuance and sale of the Designated Securities by the
Company pursuant to this Agreement and the Pricing Agreement relating
to the Designated Securities will not result in the violation by the
Company of any federal or New York statute, rule or regulation known
to such counsel to be applicable to the Company (other than federal or
state securities laws).
(v) The Registration Statement and the Prospectus (excluding
the documents incorporated by reference therein) comply as to form in
all material respects with the requirements for registration
statements on Form S-3 under the Act, the Trust Indenture Act and the
respective rules and regulations of the Commission thereunder; it
being understood, however, that such counsel need express no opinion
with respect to the financial statements, schedules and other
financial data included in the Registration Statement or the
Prospectus or with respect to the Form T-1. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, such counsel may assume that the statements made and
incorporated by reference therein are correct and complete.
(vi) The statements set forth in the Prospectus under the
headings "Description of Debt Securities" and "Description of the
Notes", insofar as such statements constitute a summary of legal
matters, are accurate in all material respects.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and,
although such counsel need not pass upon, and
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<PAGE>
need not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus, except for those referred to in the opinion in
subsection (vi) of this Section 7(c), and need not have made any
independent check or verification thereof, during the course of such
participation (relying as to materiality to the extent such counsel
deemed appropriate upon the statements of officers and other
representatives of the Company), no facts came to such counsel's
attention that caused such counsel to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date and as
of the Time of Delivery for the Designated Securities, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
it being understood that such counsel need express no belief with
respect to the financial statements, schedules and other financial
data included in the Registration Statement or the Prospectus or
incorporated therein or with respect to the Form T-1.
Such counsel shall also be permitted to state that the opinions
rendered in paragraphs (i) and (ii) relating to the enforceability of
the Designated Securities and the Indenture are subject to the
following exceptions, limitations and qualifications: (i) the effect
of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or
law, and the discretion of the court before which any proceeding
therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to
public policy; (iv) such counsel need express no opinion concerning
the enforceability of the waiver of rights or defenses contained in
Section 4.4 of the Indenture; and (v) such counsel need express no
opinion with respect to whether acceleration of the Designated
Securities may affect the collectibility of that portion of the stated
principal amount thereof which might be determined to constitute
unearned interest thereon.
Such counsel shall also be permitted to state that such counsel
has assumed for purposes of the opinion that (i) the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Oregon, and has the corporate
power and authority to consummate the transactions contemplated
hereunder; (ii) the Designated Securities have been duly authorized by
all necessary corporate action by the Company; (iii) the Indenture has
been duly authorized by all necessary corporate action by the Company
and has been duly executed and delivered by the Company under the laws
of the State of Oregon; (iv) the Trustee is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (v) the Trustee is duly qualified to engage in the
activities
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<PAGE>
contemplated by the Indenture; (vi) the Indenture has been duly
authorized, executed and delivered by the Trustee and constitutes the
legally valid, binding and enforceable obligation of the Trustee
enforceable against the Trustee in accordance with its terms; (vii)
the Trustee is in compliance, generally and with respect to acting as
a trustee under the Indenture, with all applicable laws and
regulations; and (viii) the Trustee has the requisite organizational
and legal power and authority to perform its obligations under the
Indenture.
(d) Paul J. Kelly, Jr., General Counsel to the Company, shall have
furnished to the Representatives his written opinion (a draft of such
opinion is attached as Annex II(c) hereto), dated the Time of Delivery for
such Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing under the laws of the State of Oregon, with corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus.
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented.
(iii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which the
Company or any of its Significant Subsidiaries is a party or of which
any property of the Company or any of its Significant Subsidiaries is
the subject, required to be described in the Prospectus, which are not
described as required.
(iv) Each of this Agreement and the Indenture has been duly
authorized, executed and delivered by the Company.
(v) The Designated Securities have been duly authorized,
executed, issued and delivered by the Company.
(vi) The issuance and sale of the Designated Securities by the
Company pursuant to this Agreement and the Pricing Agreement relating
to the Designated Securities and the performance by the Company of its
obligations under the Designated Securities and the Indenture will not
result in the violation by the Company of its Articles of
Incorporation or Bylaws or any federal or Oregon statute, rule or
regulation (other than federal or state securities laws) known to such
counsel to be applicable to the Company or any order known to such
counsel of any court or governmental agency or body or in the breach
of or a default under any material indenture, note, loan, agreement,
mortgage, deed of trust or other written agreement creating,
evidencing or securing indebtedness of the Company for borrowed money
or any material lease to which the Company is a party, other than any
such violations, breaches or defaults which would not have a material
adverse effect on the Company and its subsidiaries taken as a whole
and would not adversely affect the validity of the Designated
Securities.
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<PAGE>
(vii) To the best of such counsel's knowledge, no consent,
approval, authorization or order of, or filing with, any Oregon court
or governmental agency or body is required for the consummation of the
issuance and sale of the Designated Securities by the Company pursuant
to the Underwriting Agreement and the performance by the Company of
its obligations under the Designated Securities and the Indenture,
except such as may be required under state securities laws in
connection with the purchase and distribution of such Securities by
the Underwriters.
(viii) The Company is not an "investment company", as such
term is defined in the Investment Company Act.
(ix) The documents incorporated by reference into the
Prospectus (the "Incorporated Documents"), when they were filed with
the Commission, appeared on their face to comply as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; it being
understood, however, that such counsel need not express any opinion
with respect to the financial statements, schedules and other
financial data included or incorporated by reference in the
Incorporated Documents. In passing upon the compliance as to form of
the Incorporated Documents, such counsel may assume that the
statements made and incorporated by reference therein are correct and
complete.
Such counsel has no reason to believe that any of the Incorporated
Documents, when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when the Incorporated Documents were so
filed, not misleading.
(x) To the best of such counsel's knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed under
the Exchange Act, if upon such filing they would be incorporated by
reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required.
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at the Time of Delivery for such
Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex III hereto, and with respect
to such letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
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<PAGE>
satisfactory to the Representatives (the executed copy of the letter
delivered prior to the execution of the Pricing Agreement for such
Designated Securities shall be attached as Annex I(a) thereto and a draft
of the form of letter to be delivered at such Time of Delivery shall be
attached as Annex I(b) thereto);
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Securities
there shall not have been any decrease in the capital stock of the Company
or any of its Significant Subsidiaries (other than as required pursuant to
any stock repurchase plan that has been disclosed or incorporated by
reference in the Prospectus) or an increase in the consolidated long-term
debt of the Company in excess of $10 million or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
in or contemplated by the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Securities,
the effect of which, in any such case described in Clause (i) or (ii), is
in the judgment of the Representatives so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to
the Designated Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by any
Federal, New York State or Oregon State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the
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<PAGE>
terms and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities; and
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (f) of this Section and as to such other matters as
the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented or any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities; and provided,
further, that the Company shall not be liable to any Underwriter under the
indemnity agreement in this subsection (a) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage or liability of such
Underwriter results from the fact that such Underwriter sold Securities to a
person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by reference) in any
case where such delivery is required by the Act if the Company has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
which was identified in writing prior to the date of the Pricing Agreement to
such Underwriter and corrected in the Prospectus (excluding documents
incorporated by reference) or in the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) and such correction would have
cured such untrue statement or omission of a material fact giving rise to such
loss, claim, damage or liability.
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<PAGE>
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in
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such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters of the Designated Securities on
the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such
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Designated Securities, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Designated
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Designated Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full
-17-
<PAGE>
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and payment for
the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Chief Financial Officer, with a copy to
Gregory K. Miller, Latham & Watkins, 505 Montgomery Street, Suite 1900, San
Francisco, California 94111 (which copy shall not constitute notice); provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business, and "Business Day" shall mean any day or
other than a Saturday, Sunday, legal holiday or other day on which banking
institutions in New York City or Portland, Oregon are authorized or obligated by
law or executive order to close.
-18-
<PAGE>
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
16. Each Pricing Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
-19-
<PAGE>
ANNEX III
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representative or representatives of the
Underwriters (the "Representatives"), such term to include an Underwriter
or Underwriters who act without any firm being designated as its or their
representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their reports
thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures, including
inquiries of officials of the Company who have responsibility for financial
and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
<PAGE>
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not
2
<PAGE>
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
shareholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated revenues or gross margin or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented
3
<PAGE>
(including the documents incorporated by reference therein) in relation to the
applicable Designated Securities for purposes of the letter delivered at the
Time of Delivery for such Designated Securities.
4
<PAGE>
Exhibit 4.1
NIKE, INC. OFFICERS' CERTIFICATE PURSUANT TO
SECTIONS 2.2 AND 10.4 OF THE INDENTURE
Each of Robert S. Falcone and Lindsay D. Stewart does hereby certify
that he is the Vice President and Chief Financial Officer, and Vice President
and Assistant Secretary, respectively, of NIKE, Inc., an Oregon corporation (the
"Company") and further certify, pursuant to resolutions of the Board of
Directors of the Company duly adopted on June 14, 1996 (the "June Board
Resolutions") and September 16, 1996 (the "September Board Resolutions") and
resolutions of the Executive Committee of the Company duly adopted by written
consent on November 8, 1996 (the "Executive Committee Resolutions")
(collectively, the "Resolutions"), pursuant to Sections 2.2 and 10.4 of the
Indenture (the "Indenture") dated as of December 13, 1996 between the Company
and The First National Bank of Chicago, as trustee (the "Trustee"), as follows:
(a) Attached hereto as Annex A is a true and correct copy of a
-------
specimen Note (the "Form of Note") representing the Company's 6-3/8%
Notes Due December 1, 2003 (the "Notes"), which Notes constitute a separate
series of Securities under the Indenture.
(b) The Form of Note sets forth the terms required to be set forth in
this certificate pursuant to Section 2.2 of the Indenture, and said terms
are incorporated herein by reference.
(c) Each of the undersigned is authorized to approve the terms and
conditions of the Notes pursuant to the Resolutions.
(d) Attached hereto as Annex B are true and correct copies of the June
-------
Board Resolutions, the September Board Resolutions and the Executive
Committee Resolutions.
(e) Attached hereto as Annex C are true copies of the letters
-------
addressed to the Trustee entitling the Trustee to rely on the Opinions of
Counsel attached thereto, which Opinions relate to the Notes and comply
with Section 10.4(b) of the Indenture.
(f) Each of the undersigned has reviewed the provisions of the
Indenture, including the covenants and conditions precedent pertaining to
the issuance of the Notes.
(g) In connection with this certificate each of the undersigned has
examined documents, corporate records and certificates and has spoken with
other officers of the Company.
<PAGE>
(h) Each of the undersigned has made such examination and
investigation as is necessary to enable him to express an informed opinion
as to whether or not the covenants and conditions precedent of the
Indenture pertaining to the issuance of the Notes have been complied with.
(i) In our opinion all of the covenants and conditions precedent
provided for in the Indenture for the issuance of the Notes have been
complied with.
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Indenture or the Notes, as the case
may be.
2
<PAGE>
IN WITNESS WHEREOF, each of the undersigned officers has executed this
certificate this 13th day of December 1996.
________________________________
Name: Robert S. Falcone
Title: Vice President and
Chief Financial Officer
________________________________
Name: Lindsay D. Stewart
Title: Vice President and
Assistant Secretary
<PAGE>
Exhibit 4.2
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of The Depository or a
nominee thereof. This Security is exchangeable for securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository, by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
NIKE, INC.
6-3/8% Notes Due December 1, 2003
No. 1 $200,000,000
CUSIP No. 654106 AA 1
NIKE, Inc., a corporation duly organized and existing under the laws
of Oregon (herein called the "Company", which term includes any successor person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of Two
Hundred Million Dollars ($200,000,000) on December 1, 2003, and to pay interest
thereon from December 1, 1996 or from the most recent interest payment date to
which interest has been paid or duly provided for, semi-annually on June 1 and
December 1 in each year, commencing June 1, 1997 at the rate of 6-3/8% per
annum, until the principal hereof is paid or made available for payment, and (to
the extent that the payment of such interest is permitted by law) at the rate of
6-3/8% per annum on any overdue principal and on any overdue installment of
interest until paid. The interest so payable, and punctually paid or duly
provided for, on any interest payment date will be paid to the person in whose
name this Security (or one or more predecessor Securities) is registered at the
close of business on the regular record date for such interest, which shall be
the May 15 or November 15 (whether or not a Business Day), as the case may be,
next preceding such interest payment date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such regular record date and may either be paid to the person in whose name this
Security (or one or more predecessor Securities) is registered at the close of
business on a special record date for the payment of such defaulted interest to
be fixed by the Company, notice whereof shall be given to Trustee and the
Holders of Securities not less than 30 days prior to such special record date,
or be
<PAGE>
paid at any time in any other lawful manner. Interest on the Securities shall
be computed on the basis of a 360-day year of twelve 30-day months.
Payment of the principal of and interest on this Security will be made
(i) if this Security is a Global Security registered in the name of the
Depository or its nominee, to such Depository or such nominee, by wire transfer
of immediately available funds on each of the applicable interest payment dates
and (ii) if this Security is in definitive registered form, at the offices or
agencies of the Company maintained for that purpose in The Borough of Manhattan,
The City of New York, and in Chicago, Illinois, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that except with respect to a
-------- -------
Global Security, at the option of the Company payment of interest may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the register with respect to the Securities.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE>
In Witness Whereof, the Company has caused this instrument to be duly
executed.
NIKE, Inc.
By: ________________________________
Robert S. Falcone
Vice President and Chief
Financial Officer
Attest:
_________________________________________
Certificate of Authentication
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, As Trustee
Dated: December 13, 1996 By:_________________________________
Authorized Signatory
<PAGE>
Reverse of Security
This Security is one of a duly authorized series of securities of the
Company issued and to be issued under an Indenture, dated as of December 13,
1996 (herein called the "Indenture", which term shall have the meaning assigned
to it in such instrument), between the Company and The First National Bank of
Chicago, as Trustee (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $200,000,000 (herein
called the "Securities").
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Securities are subject to redemption, in whole or in part, at the
option of the Company, at any time, at a redemption price equal to the greater
of (i) 100% of the principal amount of such Securities or (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon, discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(determined on the third Business Day preceding such redemption date), plus, in
each case, accrued and unpaid interest thereon to the redemption date.
"Adjusted Treasury Rate" means the arithmetic mean of the yields under
the heading "Week Ending" published in the Statistical Release most recently
published prior to the date of determination under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the redemption date, of
the principal being redeemed. If no maturity set forth under such heading
exactly corresponds to the maturity of such principal, yields for the two
published maturities most closely corresponding to the maturity of such
principal shall be calculated pursuant to the immediately preceding sentence,
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of the relevant periods to the
nearest month.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively-traded United
States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination hereunder,
then such other reasonably comparable index which shall be designated by the
Company.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of the Securities to be
redeemed. Unless the Company defaults in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the Securities
called for redemption.
<PAGE>
In the event of redemption of this Security in part only, upon surrender of such
Security, a new Security of the same maturity equal in principal amount to the
unredeemed portion of the Security surrendered will be issued in the name of the
Holder hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
Subject to certain limitations described in the Indenture, the
Indenture permits the Company and the Trustee to enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities (including consents obtained in
connection with a tender offer or exchange offer for the Securities), for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Securityholders. Except with respect
to a Default in the payment of the principal of or interest on any Security, the
Holders of at least a majority in principal amount of the outstanding Securities
by notice to the Trustee (including consents obtained in connection with a
tender offer or exchange offer for the Securities) may waive compliance by the
Company with any provision of the Indenture or the Securities. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities, the Holders of not less than 25% in
principal amount of the Securities at the time outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee, offered the Trustee reasonable indemnity, the Trustee for
60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding and the Trustee shall not have received
from the Holders of a majority in principal amount of Securities at the time
outstanding a direction inconsistent with such request. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of the principal hereof or any interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and
<PAGE>
unconditional, to pay the principal of and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer or the exchange for an equal principal amount of
the Securities is registrable with the Registrar, upon surrender of the
Securities at the office or agency of the Registrar, duly endorsed by, or
accompanied by a written instrument of transfer or exchange in form satisfactory
to the Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon the Trustee shall, at the Registrar's
request, authenticate one or more new Securities and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued for exchange or to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
Exhibit 12.1
NIKE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
AUGUST 31,
---------- ----------
1995* 1996
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net income $182,098 $226,063
Income taxes 114,000 142,900
-------- --------
Income before income taxes 296,098 368,963
-------- --------
Add fixed charges
Interest expense (A) 11,251 12,666
Interest component of leases (B) 4,367 5,260
-------- --------
Total fixed charges 15,618 17,926
-------- --------
Earnings before income taxes and fixed charges (C) $311,716 $386,889
======== ========
Ratio of earnings to total fixed charges 19.96 21.58
======== ========
</TABLE>
* For comparable purposes with 1996, results for the three months ended
August 31, 1995 have been adjusted to reflect the elimination of the one
month lag in reporting by certain of the Company's international
operations.
(A) Interest expense includes both expensed and capitalized.
(B) Interest component of leases includes one-third of rental expense, which
approximates the interest component of operating leases.
(C) Earnings before income taxes and fixed charges is exclusive of capitalized
interest.
