Nike 2010 Annual Report Download - page 81

Table of Contents NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company does not anticipate that any foreign tax credit carry−forwards will expire. The Company has available domestic and foreign loss
carry−forwards of $89.8 million at May 31, 2010. Such losses will expire as follows:
Year Ending May 31,
2011 2012 2013 2014 2015 2016− 2028 Indefinite Total
(In millions)
Net Operating Losses $2.0 $ 1.9 $ 3.6 $ 8.9 $ 11.1 $25.7 $ 36.6 $89.8
During the years ended May 31, 2010, 2009, and 2008, income tax benefits attributable to employee stock−based compensation transactions of $56.8
million, $25.4 million, and $68.9 million, respectively, were allocated to shareholders’ equity.
Note 10 — Redeemable Preferred Stock
Sojitz America is the sole owner of the Company’s authorized Redeemable Preferred Stock, $1 par value, which is redeemable at the option of Sojitz
America or the Company at par value aggregating $0.3 million. A cumulative dividend of $0.10 per share is payable annually on May 31 and no dividends
may be declared or paid on the common stock of the Company unless dividends on the Redeemable Preferred Stock have been declared and paid in full.
There have been no changes in the Redeemable Preferred Stock in the three years ended May 31, 2010, 2009 and 2008. As the holder of the Redeemable
Preferred Stock, Sojitz America does not have general voting rights but does have the right to vote as a separate class on the sale of all or substantially all of
the assets of the Company and its subsidiaries, on merger, consolidation, liquidation or dissolution of the Company or on the sale or assignment of the NIKE
trademark for athletic footwear sold in the United States.
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.
In June 2010, the Board of Directors amended the 1990 Plan to require, among other things, that the exercise price for non−statutory stock options and stock
appreciation rights may not be less than 100% of the fair market value of the underlying shares on the date of grant.
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