NIKPR1~txt is a Nike Inc. file of the nikeworkers.com series; created Friday, June 19, 1998 5:38:16 PM; Modified Saturday, February 14, 1998 3:00:24 PM ; saved by D. Boje as NIKpr1997shareholdermtg (file origins).

UNITED METHODIST CHURCH COMMENDS COMPANY

PROGRESS ON FAIR LABOR PRACTICES

DURING SHAREHOLDER’S MEETING

NIKE Chairman and CEO Philip H. Knight announced today during the Company’s Annual Shareholder’s Meeting, that NIKE has severed its relationship with several Indonesian-based contractors to maintain compliance with its Code of Conduct requirements for wage levels and working conditions.

NIKE discontinued its relationship with Seyon, an Indonesian factory which produces specialty sport gloves following Seyon’s inability to conform to NIKE’s policy that all contractors pay full cash minimum wage with no exemptions. The Indonesian Government increased the minimum wage in April by 10.7 percent, but at the same time allowed companies to seek exemptions to that minimum wage. Seyon chose not to increase wages to the government mandated minimum wage, therefore, NIKE has suspended production there until the factory is in compliance with the NIKE Code.

Seyon has agreed to review their wage policy when their special government wage exemption expires in April, 1998 or sooner. NIKE and Seyon management will continue to negotiate the wage issue although production has ceased.

Many contract factories, (except NIKE factories) who produce products for several companies, are legally permitted through a special government exemption to pay workers below the minimum wage.

Another Indonesian-based apparel manufacturer was recently notified via letter that NIKE orders for Fall and Holiday Apparel, FY 98 would be discontinued until improvements to the factory were made.

The separate actions represents the first instance where NIKE has severed a relationship with one of its contractors following a comprehensive review of wages and Code of Conduct compliance.

"Our high standards for quality products must never supersede those standards governing fairness towards factory workers," said Knight. "Enforcing our Code of Conduct among our contractors will be a sustained effort to ensure that our high standards are always met," he added.

Also at today’s meeting, Vidette Bullock Mixon, Director of Corporate Relations and Social Responsibility of the General Board of Pensions and Social Responsibility of the United Methodists Church addressed shareholders. Ms. Bullock Mixon, representing several other socially responsible shareholders groups, formally withdrew a shareholder’s resolution the GBOP had filed with the Securities and Exchange

Commission. The resolution, offered for the second consecutive year, sought reforms in the company’s manufacturing operations and labor practices administration.

In a recent letter to NIKE, which reflected the spirit of her remarks during the meeting, Mixon wrote that the GBOP was "grateful for the actions NIKE has taken which we interpret as responsive to our concerns about fair labor practices."

In responding to the comments, Knight expressed his appreciation for the group’s willingness to sit down with NIKE and learn the facts about the company’s "leadership among athletic companies" and "continuous improvement" in its contract factories.

During the past two months, NIKE has been diligently working to fulfill the recommendations made by former United Nations Ambassador Andrew Young regarding its Code of Conduct.

Last week, NIKE began the printing and distribution of individually laminated, two-sided Code of Conduct cards to more than 100,000 factory workers in Asia. In addition, the Company has substantially increased the amount of cultural training administered to NIKE contract factory supervisors and related personnel and has strengthened its factory inspection program.

NIKE is also a founding and contributing member of the President’s Apparel Industry Partnership (AIP). The AIP, which consists of organized labor representatives, apparel industry representatives and non-governmental organizations, is drafting uniform factory regulations for global companies manufacturing products in emerging economies abroad.

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