Nike 2010 Annual Report Download - page 124

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the Performance Period. The Company’s diluted earnings per common share for each fiscal year of the Company during the Performance Period shall be as
set forth in the audited consolidated financial statements of the Company and its subsidiaries.
2.4 In the event that any acquisition of a business shall occur during the Performance Period, the Company’s Cumulative Revenue for the
Performance Period shall be appropriately adjusted to exclude the revenues of the acquired business, and the Company’s Cumulative EPS for the
Performance Period shall be appropriately adjusted to approximate the Cumulative EPS as if the acquisition had not occurred, by (a) excluding any costs of
the acquisition recorded by the Company, (b) excluding the operating income of the acquired business, (c) reducing interest expense for any cash paid or
debt incurred to fund the acquisition based on the actual interest rate of such debt or the Company’s average interest rate for borrowed funds, (d) adjusting
the tax provision to reflect the adjusted amount of pre−tax income after making the above adjustments, and (e) reducing weighted average shares
outstanding used for the EPS calculation by the number of Company shares, if any, issued in the acquisition.
2.5 In the event that any divestiture of a business shall occur during the Performance Period, the Company’s Cumulative Revenue for the
Performance Period shall be appropriately adjusted as provided in Section 2.5(i) below to reflect an assumed level of revenue of the divested business for
that portion of the Performance Period occurring after the divestiture, and the Company’s Cumulative EPS for the Performance Period shall be appropriately
adjusted (a) to exclude any gain or loss on the sale, (b) as provided in Section 2.5(ii) below to reflect an assumed level of operating income of the divested
business for that portion of the Performance Period occurring after the divestiture, (c) to reduce interest income for any cash or notes received in the
divestiture based on the actual interest rate on such notes or the Company’s average interest rate for borrowed funds, and (d) to adjust the tax provision to
reflect the adjusted amount of pre−tax income after making the above adjustments.
(i) The Company’s Cumulative Revenue for the Performance Period shall be appropriately adjusted to include the Imputed
Revenues of the divested business. “Imputed Revenues” shall mean the result obtained by multiplying the Average Daily Revenues of the divested business
by the number of calendar days in the Performance Period occurring after the divestiture. “Average Daily Revenues” shall mean the result obtained by
dividing (x) the revenues of the divested business during that portion of the Performance Period occurring prior to the divestiture by (y) the number of
calendar days in the Performance Period occurring prior to the divestiture.
(ii) The Company’s Cumulative EPS for the Performance Period shall be appropriately adjusted to reflect the Imputed Operating
Income of the divested business. “Imputed Operating Income” shall mean the result obtained by multiplying the Average Daily Operating Income of the
divested business by the number of calendar days in the Performance Period occurring after the divestiture. “Average Daily Operating Income” shall mean
the result obtained by dividing (x) the operating income of the divested business during that portion of the Performance Period occurring prior to the
divestiture by (y) the number of calendar days in the Performance Period occurring prior to the divestiture.
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