Nike 2009 Annual Report Download - page 77

NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 11 — Common Stock and Stock-Based Compensation
The authorized number of shares of Class A Common Stock, no par value, and Class B Common Stock, no
par value, are 175 million and 750 million, respectively. Each share of Class A Common Stock is convertible into
one share of Class B Common Stock. Voting rights of Class B Common Stock are limited in certain
circumstances with respect to the election of directors.
In 1990, the Board of Directors adopted, and the shareholders approved, the NIKE, Inc. 1990 Stock
Incentive Plan (the “1990 Plan”). The 1990 Plan provides for the issuance of up to 132 million previously
unissued shares of Class B Common Stock in connection with stock options and other awards granted under the
plan. The 1990 Plan authorizes the grant of non-statutory stock options, incentive stock options, stock
appreciation rights, stock bonuses and the issuance and sale of restricted stock. The exercise price for
non-statutory stock options, stock appreciation rights and the grant price of restricted stock may not be less than
75% of the fair market value of the underlying shares on the date of grant. The exercise price for incentive stock
options may not be less than the fair market value of the underlying shares on the date of grant. A committee of
the Board of Directors administers the 1990 Plan. The committee has the authority to determine the employees to
whom awards will be made, the amount of the awards, and the other terms and conditions of the awards. The
committee has granted substantially all stock options at 100% of the market price on the date of grant.
Substantially all stock option grants outstanding under the 1990 plan were granted in the first quarter of each
fiscal year, vest ratably over four years, and expire 10 years from the date of grant.
The following table summarizes the Company’s total stock-based compensation expense recognized in
selling and administrative expense:
Year Ended May 31,
2009 2008 2007
(In millions)
Stock options(1) ............................................. $128.8 $127.0 $134.9
ESPPs .................................................... 14.4 7.2 7.0
Restricted stock ............................................ 7.9 6.8 5.8
Subtotal ............................................... 151.1 141.0 147.7
Stock options and restricted stock expense — restructuring(2) ........ 19.5 — —
Total stock-based compensation expense ........................ $170.6 $141.0 $147.7
(1) In accordance with FAS 123R, stock-based compensation expense reported during the years ended May 31,
2009, 2008 and 2007 includes $56.3 million, $40.7 million and $36.3 million, respectively, of accelerated
stock-based compensation expense recorded for employees eligible for stock option vesting upon
retirement.
(2) In connection with the restructuring activities that took place during the fourth quarter of fiscal 2009, the
Company recognized stock-based compensation expense relating to the modification of stock option
agreements, allowing for an extended post-termination exercise period, and accelerated vesting of restricted
stock as part of severance packages. See Note 16 — Restructuring Charges for further details.
As of May 31, 2009, the Company had $82.3 million of unrecognized compensation costs from stock
options, net of estimated forfeitures, to be recognized as selling and administrative expense over a weighted
average period of 2.0 years.
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