Appendix 2

On May 12, 1998, Phil Knight announced six new initiatives to improve factory working conditions and increase opportunities for people who manufacture Nike products. They are:

1. Expanding Independent Monitoring
Working with NGO participation, Nike will initially focus on Vietnam, Indonesia and China. The ultimate goal is to establish a global system of independent certification of the company's labour practices, much the same way financial information in this annual report is certified. Since 1994 Nike has been working with financial auditors as PricewaterhouseCoopers and Ernst & Young

2. Raising Minimum Age Requirement
Nike has increased the minimum age of footwear factory workers to 18 and the minimum age for all other light manufacturing workers (apparel accessories, equipment) to 16. There is no tolerance for exception.

3. Strengthening Environmental, Health and Safety Management System
The program, developed with two consultancy groups (The Gauntlett Group and Environmental Resources Management) will provide every factory where Nike footwear is made the tools and training to effectively manage and ensure continuous improvement throughout their environmental, health and safety programs. The program helps each factory develop a fully functioning EHSMS by June 2001.

4. Expanded Worker Education
The Jobs and Education Program offers footwear factory workers educational opportunities, such as middle school and high school equivalence courses. The courses will be free and scheduled during non-working hours. Factory participation is voluntary, but by 2002 Nike will order only from footwear factories that offer some form of after-hours education.

5. Increasing support of Micro-enterprise Loan Program
The Jobs + Micro-enterprise Program will provide loans to women to create small businesses.

6. Building Understanding
Through the Rising Tides Program, Nike is providing research grants and logistical support to universities and colleges to expand the academic body of knowledge on corporate responsibility, contract manufacturing and development issues involving Nike and other companies. Nike will also convene a series of open forums to foster dialogue with factory workers, academics, NGOs and others interested in these issues.