Exhibit








DESCRIPTION OF NIKE, INC. CAPITAL STOCK




The following description of Nike, Inc.’s (“Company”) capital stock is a summary that is not complete and is qualified in its entirety by reference to the Company’s Restated Articles of Incorporation (“Articles of Incorporation”) and the Company’s Fifth Restated By-Laws (“By‐Laws”).


General


The Company’s Articles of Incorporation provide that it may issue up to 400,000,000 shares of Class A Common Stock, no par value (“Class A Common Stock”); 2,400,000,000 shares of Class B Common Stock, no par value (“Class B Common Stock” and collectively with the Class A Common Stock, the “Common Stock”); and 300,000 shares of Preferred Stock, par value $1.00 per share (“Preferred Stock”).  As of July 19, 2019, 315,024,752 shares of Class A Common Stock, 1,251,863,621 shares of Class B Common Stock and 300,000 shares of Preferred Stock were issued and outstanding.


Voting and Other Rights


General


Each share of Common Stock is entitled to one vote per share, voting as a single class, on all matters which stockholders generally are entitled to vote, except as provided below in the case of voting for the election of directors.  The holders of the Common Stock have no preemptive rights and are not entitled to cumulative voting. 


Shares of Class A Common Stock are convertible into shares of Class B Common Stock on a share-for-share basis any time at the option of the holder, subject to certain terms and conditions.  The Class B Common Stock does not have any conversion rights.  


Except as otherwise required by law, holders of Preferred Stock do not have general voting rights but do have the right to vote as a separate class with one vote per share on, (i) the sale of all or substantially all of the assets of the Company and its subsidiaries, (ii) on a merger, consolidation, liquidation or dissolution of the Company, or (iii) on the sale or assignment of the “NIKE” trademark for athletic shoes sold in the United States.  If any such matter is submitted for approval by the holders of the Preferred Stock and is not approved by more than 662⁄3% of such holders, then the Company has the right to redeem the shares of Preferred Stock voting against such action at the redemption price of $1.00 per share, plus accrued dividends and interest, if any, and the holders of such Preferred Stock have the right to require the Company to redeem their shares at the same price.  The outstanding shares of Preferred Stock may also be redeemed by the Company, at its option, or at the option of the holders of Preferred Stock, at a redemption price of $1.00 per share, plus any accrued dividends and interest, under certain other circumstances. 
Voting for the Election of Directors


At any time and so long as the number of outstanding shares of Class B Common Stock equals or exceeds 25% of the total outstanding shares of Common Stock, the holders of Class A Common Stock and Class B Common stock will vote as separate classes for the purposes of electing directors.  In such case, holders of Class B Common Stock, voting as a separate class, shall be entitled to elect 25% (rounded up to 











the nearest whole number) of the total number of authorized directors with holders of Class A Common Stock, voting as a separate class, electing the remaining directors. 


Notwithstanding the above paragraph, in the event that the number of outstanding shares of Class A Common Stock is less than 12.5% of the total number of Common Stock shares outstanding, the holders of Class B Common Stock, voting as a separate class, shall continue to elect 25% (rounded up to the nearest whole number) of the total number of authorized directors and the remaining directors will be elected by all holders of Common Stock voting together as a single class. 


If the number of outstanding shares of Class B Common Stock is less than 25% of the total number of Common Stock shares outstanding, the holders of the Common Stock will elect all directors voting together as a single class. 


Dividend and Liquidation Rights


Dividends on the Preferred Stock, which are preferential and cumulative, are at the rate of $0.10 per share per annum.  Any unpaid dividends on the Preferred Stock accrue interest at the rate of 12% per annum. 


The holders of Class A Common Stock and Class B Common Stock are entitled to share ratably in dividends when and as declared by the Company’s Board of Directors.  Dividends on the Common Stock may not be paid in any fiscal year unless all dividends for such fiscal year on all outstanding shares of Preferred Stock have been declared and paid, or set apart for payment, in full.


Holders of Class A and Class B Common Stock also are entitled to share ratably in any proceeds legally available for distribution to shareholders upon liquidation or dissolution, after provision is first made for holders of the Preferred Stock.  Holders of Preferred Stock are entitled to receive $1.00 per share, together with dividends declared and unpaid, prior to any payment upon liquidation to holders of the outstanding Common Stock.


Anti-takeover Effects of Certain Provisions of the Certificate of Incorporation and By-Laws


The provisions of the Company’s Articles of Incorporation and By-Laws summarized below may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt.


Voting Thresholds


The Company’s Articles of Incorporation provide that a vote of 80% of all of the outstanding Common Stock, voting together as one class, is required to approve a merger, sale of assets or similar business transaction with any beneficial holder of 10% or more of the Company’s Common Stock, unless the transaction is first approved by the Board of Directors.  The 80% vote in such instance must include the affirmative vote of at least 50% of the Common Stock held by persons other than the interested party.  Additionally, any amendment of provisions of the Articles of Incorporation concerning the 80% voting provisions, the number of directors constituting the Board of Directors, and the removal of directors, also requires the approval of the holders of 80% of the outstanding Common Stock.
These provisions with respect to super-majority voting requirements may make it more difficult for any person interested in acquiring the Company to effect a merger or other business combination with the Company.  Any shareholder or group of shareholders owning more than 20% of the Common Stock 











will have effective veto power over certain proposed acquisitions of the Company.  Such provisions could result in the holders of a majority of the outstanding voting Common Stock being unable to effect requisite shareholder approval, even though the terms of such combination might be considered favorable.
Authorized but Unissued Common Stock


The Company’s shares of authorized and unissued common stock will be available for future issuance without additional stockholders approval, provided that that the Company shall at all times keep available enough shares of Class B Common Stock as would be needed to convert all outstanding shares of Class A Common Stock to Class B Common Stock on a share-for-share basis.  The existence of authorized but unissued shares of Common Stock may enable the Company’s Board of Directors to render more difficult or to discourage an attempt to obtain control of the Company by means of a merger, tender offer or otherwise.


No Cumulative Voting


The Articles of Incorporation do not grant holders of the Common Stock the right to vote cumulatively.


Notice Provisions Relating to Stockholder Proposals and Nominees


The Company’s By-Laws contain provisions requiring stockholders to give advance written notice to the Company of a proposal or director nomination in order to have the proposal or the nominee considered at an annual meeting of stockholders.  The notice for a shareholder proposal must be received not less than 60 days prior to the meeting.


Market Listing


The Company’s Class B Common Stock is listed under the New York Stock Exchange under the symbol “NKE”.


Transfer Agents and Registrar


The transfer agent and registrar for the Company’s Common Stock is Computershare Trust Company, Inc..