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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): November 18, 2008
NORDSTROM, INC.
(Exact name of registrant as specified in its charter)
| Washington | 001-15059 | 91-0515058 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 1617 SIXTH AVENUE, SEATTLE, WASHINGTON | 98101 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (206) 628-2111
INAPPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(c) On November 19, 2008, the Compensation Committee of the Company’s Board of Directors
unanimously approved an amendment to the Company’s 2004 Equity Incentive Plan (the “EIP”) to permit
the Company to grant restricted stock units as a form of incentive compensation under the EIP, and
to change the required minimum period for vesting for awards of restricted stock and restricted
stock units from three years to six months, all in order to provide the Company with greater
flexibility in structuring awards of incentive compensation. This summary of the material
amendments to the EIP is qualified by the text of the EIP, as amended, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K, and which is incorporated herein by this
reference.
On November 19, 2008, the Compensation Committee of the Company’s Board of Directors
unanimously approved an amendment to the Company’s Executive Deferred Compensation Plan (the
“EDCP”) to clarify that compensation deferred by an executive into the EDCP is subject
to the Company’s clawback policy and may be recaptured by the Company in accordance with the terms
of that policy. This summary of the material amendments to the EDCP is qualified by the text of
the EDCP, as amended, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K,
and which is incorporated herein by this reference.
On November 19, 2008, the Board of Directors of the Company, upon recommendation of its
Compensation Committee, amended the Company’s Leadership Separation Plan (the “LSP”) to remove the
positions of President, President — Stores and President — Merchandising from eligibility to
receive benefits under the LSP. In addition, the LSP was amended to clarify its classification
under the Employee Retirement Income Security Act of 1974, to amend the LSP to conform with the
requirements under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
to delegate to the Compensation Committee and the Company’s Executive Vice President — Human
Resources and Diversity Affairs, the Board’s authority to make plan amendments and administrative
changes, respectively, to the LSP. This summary of the material amendments to the LSP is qualified
by the text of the LSP, as amended, a copy of which is filed as Exhibit 10.3 to this Current Report
on Form 8-K, and which is incorporated herein by this reference.
On November 19, 2008, the Board of Directors of the Company, upon recommendation of its
Compensation Committee, amended the Company’s Supplemental Executive Retirement Plan (the “SERP”)
to conform with the requirements under Section 409A of the Code. The amendments include inserting
within the SERP 409A-required definitions of disability and separation from active employment. In
addition, the amendments include clarifying that benefit payments may not be accelerated unless
permitted by 409A and clarifying that key employees are subject to a six-month wait for payment of
benefits. In addition, the approved amendments to the SERP include certain revisions intended to
make the SERP more consistent with the Company’s other benefit plans, including the clarification
that benefits payable under the SERP are subject to recapture pursuant to the Company’s clawback
policy, and the clarification of the authority of the Compensation Committee and the Company’s
Executive Vice President — Human Resources and Diversity Affairs to make certain future amendments
and administrative changes, respectively, to the SERP. This summary of the material amendments to
the SERP is
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qualified by the text of the SERP, as amended, a copy of which is filed as Exhibit 10.4 to this
Current Report on Form 8-K, and which is incorporated herein by this reference.
(d) Effective November 18, 2008, the Board of Directors of the Company, upon recommendation of its
Corporate Governance and Nominating Committee, appointed Robert D. Walter, former Chief Executive
Officer of Cardinal Health, Inc., to the Board of Directors of Nordstrom.
Mr. Walter will receive compensation for his service on the Board in accordance with the terms
described under the caption “Director Compensation” of the Company’s proxy statement that was filed
with the Securities and Exchange Commission on April 10, 2008.
ITEM 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a) On November 19, 2008, the Board of Directors of the Company approved certain amendments to the
Company’s Bylaws.
— The Bylaws were amended to revise Section 12 of Article II to clarify that the procedures set
forth in the Bylaws are the exclusive means for a shareholder to submit nominees for director.
— The Bylaws were amended to revise Section 13 of Article II to clarify that the procedures set
forth in the Bylaws are the exclusive means for a shareholder to submit business for consideration
at an Annual or Special Meeting of Shareholders.
— The Bylaws were amended to revise Sections 12 and 13 of Article II to expand the disclosures
that a shareholder must provide when submitting a director nomination or other business proposal,
respectively, to include: (i) certain details about all ownership interests in the Company by the
shareholder and any beneficial owner on whose behalf the director nomination or proposal is made,
such as any derivative, swap, short positions or hedging transactions, (ii) a description of any
performance related fees associated with the value of Company stock that the shareholder may
receive, and (iii) a representation to update the required information. In addition, these
sections were revised to clarify the applicability of the advance notice provisions to all director
nominations or other business proposal, respectively, whether submitted for inclusion in the
Company’s proxy statement or included in an independently financed proxy statement, and to clarify
the applicability of the advance notice provisions at both Annual and Special Meetings of the
Company’s shareholders.
— The Bylaws were amended to revise Article XI to clarify that the right of a member of the
Company’s Board of Directors to indemnification in connection with claims or losses incurred as a
director includes a right to expense advancement and vests at the time the individual becomes a
member of the Board.
The preceding is qualified in its entirety by reference to the Company’s Bylaws, which are attached
hereto as Exhibit 3.1 and are incorporated herein by reference.
ITEM 8.01 Other Events.
On November 19, 2008, the Company issued a press release announcing that its Board of
Directors had approved a quarterly dividend. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
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ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits
| EXHIBIT | ||
| NUMBER | DESCRIPTION | |
3.1
|
Bylaws, as amended and restated on November 19, 2008 | |
10.1
|
Nordstrom, Inc. 2004 Equity Incentive Plan (2008 Amendment) | |
10.2
|
Amendment 2008-2 to the Nordstrom Executive Deferred Compensation Plan (2007 Restatement) | |
10.3
|
Amendment 2008-1 to the Nordstrom Leadership Separation Plan | |
10.4
|
Nordstrom, Inc. Supplemental Executive Retirement Plan (2008 Restatement) | |
99.1
|
Press Release dated November 19, 2008. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NORDSTROM, INC. |
||||
| By: | /s/ David G. Johansen | |||
| David G. Johansen | ||||
| Vice President and Secretary | ||||
Dated: November 24, 2008
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EXHIBIT INDEX
| EXHIBIT | ||
| NUMBER | DESCRIPTION | |
3.1
|
Bylaws, as amended and restated on November 19, 2008 | |
10.1
|
Nordstrom, Inc. 2004 Equity Incentive Plan (2008 Amendment) | |
10.2
|
Amendment 2008-2 to the Nordstrom Executive Deferred Compensation Plan (2007 Restatement) | |
10.3
|
Amendment 2008-1 to the Nordstrom Leadership Separation Plan | |
10.4
|
Nordstrom, Inc. Supplemental Executive Retirement Plan (2008 Restatement) | |
99.1
|
Press Release dated November 19, 2008. |
Exhibit 3.1
BYLAWS
OF
NORDSTROM, INC.
OF
NORDSTROM, INC.
(Amended and Restated as of November 19, 2008)
ARTICLE I
Offices
Offices
The principal office of the corporation in the state of Washington shall be located in the
city of Seattle. The corporation may have such other offices, either within or without the state
of Washington, as the Board of Directors may designate or as the business of the corporation may
require from time to time.
The registered office of the corporation required by the Washington Business Corporation Act
to be maintained in the state of Washington may be, but need not be, identical with the principal
office in the state of Washington and the address of the registered office may be changed from time
to time by the Board of Directors or by officers designated by the Board of Directors.
ARTICLE II
Shareholders
Shareholders
Section 1. Annual Meetings. The annual meeting of the shareholders shall be held on
the third Tuesday in the month of May each year, at the hour of 11:00 a.m., unless the Board of
Directors shall have designated a different hour and day in the month of May to hold said meeting.
The meeting shall be for the purpose of electing directors and the transaction of such other
business as may come before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the state of Washington and if the Board of Directors has not designated some other day
in the month of May for such meeting, such meeting shall be held at the same hour and place on the
next succeeding business day not a holiday. The failure to hold an annual meeting at the time
stated in these Bylaws does not affect the validity of any corporate action. If the election of
directors shall not be held on the day designated herein or by the Board of Directors for any
annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the shareholders as soon thereafter as
conveniently may be.
Section 2. Special Meetings. Special meetings of the shareholders may be called for
any purpose or purposes, unless otherwise prescribed by statute, at any time by the Non-Executive
Chairman of the Board of Directors, by the President (or any Co-President) if there is not then a
Non-Executive Chairman of the Board of Directors or by the Board of Directors and shall be called
by the Non-Executive Chairman of the Board of Directors or the President (or any Co-President) at
the request of holders of not less than 15% of all outstanding shares of the corporation entitled
to vote on any issue proposed to be considered at the meeting.
Only business within the purpose or
purposes described in the meeting notice may be conducted at a special shareholder’s meeting.
Section 3. Place of Meeting. The Board of Directors may designate any place, either
within or without the state of Washington, as the place of meeting for any annual meeting or for
any special meeting of the corporation. If no such designation is made, the place of meeting shall
be the principal offices of the corporation in the state of Washington.
Section 4. Notice of Meetings. Written notice of annual or special meetings of
shareholders stating the place, day and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be given by the Secretary, or
persons authorized to call the meeting, to each shareholder of record entitled to vote at the
meeting, not less than ten (10) nor more than sixty (60) days prior to the date of the meeting,
unless otherwise prescribed by statute.
Section 5. Waiver of Notice. Notice of the time, place and purpose of any meeting
may be waived in writing (either before or after such meeting) and will be waived by any
shareholder by attendance of the shareholder in person or by proxy, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business at the meeting.
Any shareholder waiving notice of a meeting shall be bound by the proceedings of the meeting in all
respects as if due notice thereof had been given.
Section 6. Record Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders, or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or to make a determination of shareholders for any
other proper purpose, the Board of Directors may fix in advance a record date for any such
determination of shareholders, such date to be not more than seventy (70) days and, in the case of
a meeting of shareholders, not less than ten (10) days, prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If no record date is fixed for
the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the day before the date on which notice of
the meeting is mailed or the date on which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this Section, the determination shall apply to any adjournment
thereof, unless the Board of Directors fixes a new record date, which it must do if the meeting is
adjourned more than one hundred twenty (120) days after the date fixed for the original meeting.
Section 7. Voting Lists. After fixing a record date for a shareholders’ meeting, the
corporation shall prepare an alphabetical list of the names of all shareholders on the record date
who are entitled to notice of the shareholders’ meeting. The list shall show the address of and
number of shares held by each shareholder. A shareholder, shareholder’s agent, or a shareholder’s
attorney may inspect the shareholder list, at the shareholder’s expense, beginning ten days prior
to the shareholders’ meeting and continuing through the meeting, at
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the corporation’s principal
office or at a place identified in the meeting notice in the city
where the meeting will be held during regular business hours. The shareholder list shall be kept
open for inspection at the time and place of such meeting or any adjournment.
Section 8. Quorum and Adjourned Meetings. Unless the Articles of Incorporation or
applicable law provide otherwise, a majority of the outstanding shares of the corporation entitled
to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders.
Once a share is represented at a meeting, other than to object to holding the meeting or
transacting business, it is deemed to be present for the remainder of the meeting and any
adjournment thereof unless a new record date is set or is required to be set for the adjourned
meeting. A majority of the shares represented at a meeting, even if less than a quorum, may
adjourn the meeting from time to time without further notice. At a reconvened meeting at which a
quorum shall be present or represented, any business may be transacted which might have been
transacted at the original meeting. Business may continue to be conducted at a duly organized
meeting and at any adjournment of such meeting (unless a new record date is or must be set for the
adjourned meeting), notwithstanding the withdrawal of enough shares from either meeting to leave
less than a quorum.
Section 9. Proxies. At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by the shareholder’s duly authorized attorney in fact.
Such proxy shall be filed with the Secretary of the corporation before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless
otherwise provided in the proxy.
Section 10. Voting of Shares. Every shareholder of record shall have the right at
every shareholders’ meeting to one vote for every share standing in the shareholder’s name on the
books of the corporation. If a quorum exists, action on a matter, other than election of
directors, is approved by the shareholders if the votes cast favoring the action exceed the votes
cast opposing the action, unless the Articles of Incorporation or applicable law require a greater
number of affirmative votes. Notwithstanding the foregoing, shares of the corporation may not be
voted if they are owned, directly or indirectly, by another corporation and the corporation owns,
directly or indirectly, a majority of shares of the other corporation entitled to vote for
directors of the other corporation.
Section 11. Acceptance of Votes. If the name signed on a vote, consent, waiver or
proxy appointment does not correspond to the name of a shareholder of the corporation, the
corporation may accept the vote, consent, waiver or proxy appointment and give effect to it as the
act of the shareholder if: (i) the shareholder is an entity and the name signed purports to be
that of an officer, partner or agent of the entity; (ii) the name signed purports to be that of an
administrator, executor, guardian or conservator representing the shareholder; (iii) the name
signed purports to be that of a receiver or trustee in bankruptcy of the shareholder; (iv) the name
signed purports to be that of a pledgee, beneficial owner or attorney-in-fact of the shareholder;
or (v) two or more persons are the shareholder as co-tenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing appears to be
acting on behalf of all co-owners.
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Section 12. Nomination of Directors. Only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors of the corporation.
Nominations of persons for election to the Board of Directors may be made at any annual meeting of
shareholders (a) by or at the direction of the Board of Directors (or any duly authorized committee
thereof) or (b) by any shareholder of the corporation (i) who is a shareholder of record on the
date of the giving of the notice provided for in this Section 12 and on the record date for the
determination of shareholders entitled to vote at the annual meeting and (ii) who timely complies
with the notice procedures and form of notice set forth in this Section 12. This Section 12 shall
be the exclusive means for a shareholder to submit nominations of persons for election to the Board
of Directors.
To be timely, a shareholder’s notice must be given to the Secretary of this corporation in
proper form and must be delivered to or mailed and received at the principal executive offices of
the corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to
the anniversary of the immediately preceding annual meeting of shareholders; provided,
however, that in the event that the annual meeting is called for a date that is not within
thirty (30) days before or after the anniversary date, or no annual meeting was held in the
immediately preceding year, notice by the shareholder in order to be timely must be so received no
later than the close of business on the tenth (10th) days following the day on which the notice of
the annual meeting date was mailed to shareholders.
To be in the proper form, a shareholder’s notice must be in written form and must set forth
(a) as to each person whom the shareholder proposes to nominate for election as a director (i) the
name, age, business address and residence address of the proposed nominee, (ii) the principal
occupation or employment of the proposed nominee, (iii) the class or series and number of shares of
capital stock of the corporation which are owned beneficially or of record by the proposed nominee,
(iv) a description of any agreement, arrangement or understanding (including any derivative, swap
or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares)
that has been entered into as of the date of the shareholder’s notice by, or on behalf of the
proposed nominee or any of its affiliates or associates, the effect or intent of which is to
mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the
voting power of, the proposed nominee or any of its affiliates or associates with respect to shares
of stock of the corporation, and a representation that the shareholder will notify the corporation
in writing of any such agreement, arrangement or understanding in effect as of the record date for
the meeting of shareholders at which the shareholder intends to nominate the proposed nominee
promptly following the later of the record date or the date notice of the record date is first
publicly disclosed, and (v) any other information relating to the proposed nominee that would be
required to be disclosed in a proxy statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended (the “Act”) and the rules and regulations promulgated thereunder
and (b) as to the shareholder giving the notice (i) the name and record address of the shareholder
, (ii) the class or series and number of shares of capital stock of the corporation which are owned
beneficially or by record by the shareholder, (iii) a
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reasonably detailed description of all
agreements, arrangements or understandings between
the shareholder and each proposed nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by the shareholder, (iv) a representation that
the shareholder intends to appear in person or by proxy at the meeting to nominate the person named
in its notice, (v) a description of any agreement, arrangement or understanding (including any
derivative, swap or short positions, profit interests, options, hedging transactions, and borrowed
or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on
behalf of, the shareholder or any of the shareholder’s affiliates or associates, the effect or
intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or
increase or decrease the voting power of the or any of the shareholder’s affiliates or associates
with respect to shares of stock of the corporation, and a representation that the shareholder will
notify the
corporation in writing of any such agreement, arrangement or understanding in effect as
of the record date for the meeting of shareholders at which the shareholder intends to nominate the
proposed nominee promptly following the later of the record date or the date notice of the record
date is first publicly disclosed, (vi) a representation whether the shareholder intends to solicit
proxies from shareholders in support of the nomination, (vii) any performance related fees (other
than an asset based fee) that such shareholder is entitled to based on any increase or decrease in
the price or value of shares of any class or series of this corporation, and (viii) any other
information relating to the shareholder that would be required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. The notice must be accompanied by a written consent of each proposed nominee to be
named as a nominee and to serve as a director if elected.
Notwithstanding anything to the contrary in these Bylaws, no person shall be eligible for
election as a director of the corporation unless nominated in accordance with the procedures set
forth in this Section 12, whether such proposed nominee is to be included in the corporation’s
proxy statement or presented to shareholders by means of an independently financed proxy
solicitation. If the chairman of the annual meeting determines that a nomination was not made in
accordance with the foregoing procedures, the chairman shall declare to the meeting that the
nomination was defective and the defective nomination shall be disregarded.
Section 13. Business at Shareholder Meetings. At any annual or special meeting of
shareholders, only such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual or special meeting of shareholders, business must
be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors (or any duly authorized
committee thereof), or (c) otherwise properly brought before the annual or special meeting by any
shareholder who is a shareholder of record on the date of the giving of the written notice required
by this Section 13 and on the record date for determination of shareholders entitled to vote at the
meeting.
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This Section 13 shall be the exclusive means for a shareholder to submit business before
a meeting of shareholders.
Without qualification, for business to be properly brought before an annual or special meeting
of shareholders by a shareholder (other than the nomination of a person for election as a director,
which is governed by Section 12 of Article II of these Bylaws), the shareholder intending to
propose the business must timely comply with the notice procedures and the form of notice set forth
in this Section 13.
For the written notice to be timely for purposes of an annual meeting, a shareholder’s notice
must be given to the Secretary of the corporation in proper form and must be delivered to or mailed
and received at the principal executive offices of the corporation not less than ninety (90) days
nor more than one hundred twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however, that in the event that the annual
meeting is called for a date that is not within thirty (30) days before or after the anniversary
date, notice by the shareholder in order to be timely must be so received no later than the close
of business on the tenth (10th) day following the day on which the notice of the annual meeting
date was mailed to shareholders. In no event shall any adjournment or postponement of an annual
meeting or a public announcement thereof commence a new time period for the giving of a
shareholder’s notice.
For the written notice to be timely for purposes of a special meeting, a shareholder’s notice
must be given to the Secretary of the corporation in proper form and must be delivered to or mailed
and received at the principal executive offices of the corporation not less than ninety (90) days
nor more than one hundred twenty (120) days prior to the date of such special meeting of
shareholders; provided, however, that if the first public announcement of the date of such special
meeting is less than one hundred (100) days prior to the date of such special meeting, the
10th day following the day on which public announcement is first made of the date of the
special meeting.
To be in proper form, a shareholder’s notice must be in written form and must set forth as to
each matter the shareholder proposes to bring before the meeting and as to the shareholder (i) a
brief description of the business desired to be brought before the meeting and the reasons for
documenting the business at the meeting, (ii) the name and record address of the shareholder, (iii)
the number of shares of capital stock of the corporation which are owned beneficially or of record
by the shareholder, (iv) a reasonably detailed description of all agreements, arrangements or
understandings between the shareholder and any other person or persons (including their names) in
connection with the proposal of the business (v) a description of any agreement, arrangement or
understanding (including any derivative, swap or short positions, profit interests, options,
hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of
the shareholder’s notice by, or on behalf of, the shareholder or any of its affiliates or
associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share
price changes for, or increase or decrease the voting power of the shareholder or any of its
affiliates or associates with respect to shares of stock of the corporation, and a representation
that the shareholder will notify the
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corporation in writing of any such agreement, arrangement or
understanding in effect as of the record date for the meeting promptly following the later of the
record date or the date
notice of the record date is first publicly disclosed, (vi) any performance related fees (other
than an asset based fee) that such shareholder is entitled to based on any increase or decrease in
the price or value of shares of any class or series of the corporation, (vii) a representation that
the shareholder intends to appear in person or by proxy at the meeting to bring such business
before the meeting, and (ix) a representation whether the shareholder intends to deliver a proxy
statement and/or form of proxy to holders of at least the percentage of the corporation’s
outstanding shares required to approve the proposal and/or otherwise solicit proxies from
shareholders in support of the proposal.
Notwithstanding anything to the contrary in these Bylaws: (a) no business shall be conducted
at any annual or special meeting of shareholders except in accordance with the procedures set forth
in this Section 13 of this Article II, and (b) unless otherwise required by law, if a shareholder
intending to propose business at an annual or special meeting of shareholders does not comply with
the procedures set forth in this Section 13, such business shall not be transacted. If the
chairman of the meeting determines that business was not properly brought before the meeting in
accordance with the foregoing procedures, the chairman shall declare to the meeting that the
business was not properly brought before the meeting and the business shall not be transacted.
The requirements of this Section 13 shall apply to any business to be brought before a meeting
by a shareholder (other than the nomination of a person for election as a director, which is
governed by Section 12 of Article II of these Bylaws) whether such business is to be included in
this corporation’s proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of
1934, as amended, or presented to shareholders by means of an independently financed proxy
solicitation. The requirements of this Section 13 are intended to provide this corporation with
notice of a shareholder’s intention to bring business before an annual or special meeting of
shareholders and shall in no event be construed as imposing upon any shareholder the requirement to
seek approval from the corporation as a condition precedent to bringing any such business before an
annual or special meeting of shareholders.
ARTICLE III
Board of Directors
Board of Directors
Section 1. General Powers. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed under the direction
of, its Board of Directors, except as may be otherwise provided in these Bylaws, the Amended and
Restated Articles of Incorporation or the Washington Business Corporation Act. The Board of
Directors may, in its discretion, appoint a Non-Executive Chairman of the Board of Directors; and,
if a Non-Executive Chairman has been appointed, the Non-Executive Chairman shall, when present,
preside at all meetings of the Board of Directors and shall have such other powers as the Board of
Directors may prescribe.
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Section 2. Election. In any election of directors which is not a contested election
(hereinafter an “uncontested election”), each vote entitled to be cast may be voted for, voted
against or, to the extent afforded as a specific voting choice, withheld for, one or more
nominees for director up to that number of nominees that is equal to the number of directors to be
elected but without cumulating the votes, or a shareholder may indicate an abstention for one or
more nominees for director. Votes cast for, against and/or withheld as to a nominee for director
shall be deemed to be votes cast in an uncontested election. A nominee for director in an
uncontested election shall be elected to the Board of Directors if the votes cast for such
nominee’s election exceed the other votes cast in connection with such nominee’s election at a
meeting at which a quorum is present.
In any election which is a contested election, the nominees receiving a plurality of the votes
cast by holders of shares entitled to vote in the election at a meeting at which a quorum is
present will be elected. A “contested election” means an election of directors of the corporation
in which the number of nominees for any election of directors nominated by (i) the Board of
Directors, or (ii) any shareholder pursuant to Article II, Section 12 of these Bylaws, or (iii) a
combination of nominees by the Board of Directors and any shareholder pursuant to Article II,
Section 12 of these Bylaws, exceed the number of directors to be elected.
Shares otherwise present at a meeting but for which there is an abstention or as to which no
authority or direction to vote in the election is given or specified, are not deemed to be votes
cast in the election.
The foregoing provisions on election of directors do not apply to vacancies and newly created
directorships filled by a vote of the Board of Directors under Article III, Section 9 of these
Bylaws.
Section 3. Number, Tenure and Qualifications. The Board of Directors shall consist
of not less than nine (9) nor more than twelve (12) directors, with the specific number to be
determined from time to time by resolution of the Board of Directors. No decrease in the number of
Directors shall have the effect of shortening the term of any incumbent Director. Each director
shall hold office until the next annual meeting of shareholders and until his successors shall have
been elected and qualified. Notwithstanding the foregoing, a nominee for director in an
uncontested election who does not receive the requisite votes for election, but who was a director
at the time of the election, shall continue to serve as a director for a term that shall terminate
on the date that is the earlier of: (i) ninety (90) days from the date on which the voting results
of the election are determined, or (ii) the date on which an individual is selected by the Board of
Directors to fill the office held by such director, which selection shall be deemed to constitute
the filling of a vacancy by the Board of Directors. Directors need not be residents of the state of
Washington or shareholders of the corporation.
Section 4. Regular Meeting. A regular meeting of the Board of Directors shall be
held without other notice than this Bylaw immediately after and at the same place as, the annual
meeting of shareholders. Regular meetings of the Board of Directors shall be held at
8
such place
and on such day and hour as shall from time to time be fixed by the Non-Executive Chairman of the
Board of Directors, the President (or any Co-President) or the
Board of Directors. No other notice of regular meeting of the Board of Directors shall be
necessary.
Section 5. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Non-Executive Chairman of the Board of Directors, the President
(or any Co-President) or any two directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without the state of
Washington, as the place for holding any special meeting of the Board of Directors called by them.
Section 6. Notice. Notice of any special meeting shall be given at least two days
previously thereto by either oral or written notice. Any director may waive notice of any meeting.
The attendance of a director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of directors then in office shall
constitute a quorum for the transaction of business at any meeting of the Board of Directors, but
if less than such majority is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice.
Section 8. Manner of Acting. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
Section 9. Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though less than a quorum
of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. A vacancy on the Board of Directors created by reason of an
increase in the number of directors may be filled by election by the Board of Directors for a term
of the office continuing only until the next election of directors by the shareholders.
Section 10. Compensation. By resolution of the Board of Directors, each director may
be paid his expenses, if any, of attendance at each meeting of the Board of Directors and at each
meeting of a committee of the Board of Directors and may be paid a stated salary as director, a
fixed sum for attendance at each such meeting, or both. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving compensation therefor.
Section 11. Presumption of Assent. A director of the corporation who is present at a
meeting of the Board of Directors at which action on any corporate matter is taken shall be
9
presumed to have assented to the action taken unless his dissent shall be entered in the minutes of
the meeting, or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or shall forward such
dissent by registered mail to the Secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in favor of such
action.
Section 12. Committees. The Board of Directors, by resolution adopted by the greater
of a majority of the Board of Directors then in office and the number of directors required to take
action in accordance these Bylaws, may create standing or temporary committees, including an
Executive Committee, and appoint members from its own number and invest such committees with such
powers as it may see fit, subject to such conditions as may be prescribed by the Board of
Directors, the Articles of Incorporation, these Bylaws and applicable law. Each committee must
have two or more members, who shall serve at the pleasure of the Board of Directors.
Section 12.1. Authority of Committees. Except for the executive committee which,
when the Board of Directors is not in session, shall have and may exercise all of the authority of
the Board of Directors except to the extent, if any, that such authority shall be limited by the
resolutions appointing the executive committee, each committee shall have and may exercise all of
the authority of the Board of Directors to the extent provided in the resolution of the Board of
Directors creating the committee and any subsequent resolutions adopted in like manner, except that
no such committee shall have the authority to: (1) authorize or approve a distribution except
according to a general formula or method prescribed by the Board of Directors, (2) approve or
propose to shareholders sections or proposal required by the Washington Business Corporation Act to
be approved by shareholders, (3) fill vacancies on the Board or any committee thereof, (4) amend
the Articles of Incorporation pursuant to RCW 23B.10.020, (5) adopt, amend or repeal Bylaws, (6)
approve a plan of merger not requiring shareholder approval, or (7) authorize or approve the
issuance or sale or contact for sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares except that the Board may authorize a
committee or a senior executive officer of the corporation to do so within limits specifically
prescribed by the Board.
Section 12.2. Removal. The Board of Directors may remove any member of any committee
elected or appointed by it but only by the affirmative vote of the greater of a majority of the
directors then in office and the number of directors required to take action in accordance with
these Bylaws.
Section 12.3. Minutes of Meetings. All committees shall keep regular minutes of
their meetings and shall cause them to be recorded in books kept for that purpose.
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ARTICLE IV
Special Measures Applying to Both
Shareholder and Director Meetings
Special Measures Applying to Both
Shareholder and Director Meetings
Section 1. Actions Without Meeting.
(a) Any corporate action required or permitted by the Articles of Incorporation, Bylaws,
or the laws under which the corporation is formed, to be voted upon or approved at a duly
called meeting of the directors or committee of directors may be accomplished without a
meeting if one or more unanimous consents of the directors setting forth the actions so
taken, shall be signed, either before or after the action taken, by all the directors or
committee members as the case may be. The consents shall be set forth either (i) in an
executed written record or (ii) if the Board of Directors has designated an address,
location, or system to which the consents may be electronically transmitted and the consent
is electronically transmitted to the designated address, location, or system, in an
executed electronically transmitted record. Action taken by unanimous consent of the
directors or a committee of the Board of Directors is effective when the last director or
committee member signs the consent, unless the consent specifies a later effective date.
(b) Any corporate action required or permitted by the Articles of Incorporation, Bylaws,
or the laws under which the corporation is formed, to be voted upon or approved at a duly
called meeting of the shareholders may be accomplished without a meeting if one or more
unanimous written consents of the shareholders, setting forth the actions so taken, shall
be signed, either before or after the action taken, by all the shareholders, as the case
may be. Action taken by unanimous written consent of the shareholders is effective when
all consents are in possession of the corporation, unless the consent specifies a later
effective date.
Section 2. Meetings by Conference Telephone. Members of the Board of Directors,
members of a committee of directors, or shareholders may participate in their respective meetings
by means of a conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time; participation in a
meeting by such means shall constitute presence in person at such meeting.
Section 3. Written or Oral Notice. Oral notice may be communicated in person, or by
telephone, wire or wireless equipment, which does not transmit a facsimile of the notice. Oral
notice is effective when communicated. Written notice may be transmitted by mail, private carrier,
or personal delivery; telegraph or teletype; or telephone, wire or wireless equipment which
transmits a facsimile of the notice. Written notice to a shareholder is effective when mailed, if
mailed with first class postage prepaid and correctly addressed to the shareholder’s address shown
in the corporation’s current record of shareholders. In all other instances, written notice is
effective on the earliest of the following: (a) when dispatched to the person’s address, telephone
number, or other number appearing on the records of the corporation by telegraph, teletype or
facsimile equipment; (b) when received;
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(c) five days after deposit in the United States mail, as
evidenced by the postmark, if mailed with first class postage, prepaid and correctly addressed; or
(d) on the date shown on the return receipt, if sent by registered or certified mail, return
receipt requested and the receipt is signed by or on behalf of the addressee. In addition, notice
may be given in any manner not inconsistent with the foregoing provisions and applicable law.
ARTICLE V
Officers
Officers
Section 1. Number. The offices and officers of the corporation shall be as
designated from time to time by the Board of Directors. Such offices may include a President or
two or more Co-Presidents, one or more Vice Presidents, a Secretary and a Treasurer. Such other
officers and assistant officers as may be deemed necessary may be elected or appointed by the Board
of Directors. Any two or more offices may be held by the same persons.
Section 2. Election and Term of Office. The officers of the corporation shall be
elected annually by the Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of shareholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall
hold office until a successor shall have been duly elected and qualified, or until the officer’s
death or resignation, or the officer has been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the Board of Directors
whenever in its judgment, the best interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired
portion of the term.
Section 5. President. The President or Co-Presidents, shall have general supervision
and control over the business and affairs of the corporation subject to the authority of the
Non-Executive Chairman of the Board of Directors and the Board of Directors. The President or a
Co-President may sign any and all documents, mortgages, bonds, contracts, leases, or other
instruments in the ordinary course of business with or without the signature of a second corporate
officer, may sign certificates for shares of the corporation with the Secretary or Assistant
Secretary of the corporation and may sign any documents which the Board of Directors has authorized
to be executed, except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of President
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and such other duties, authority and
responsibilities as may be prescribed by the Board of Directors from time to time.
Section 6. The Vice President. In the absence of the President and all
Co-Presidents, or in the event of their death, inability or refusal to act, the Executive Vice
President, if one is designated and otherwise the Vice Presidents in the order designated at the
time of their
election or in the absence of any designation, then in the order of their election, shall perform
the duties of the President and when so acting, shall have all the powers of and be subject to all
the restrictions upon the President. Any Vice President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the corporation; and shall perform such other
duties as from time to time may be assigned to the Vice President by the President or any
Co-President, or by the Board of Directors.
Section 7. The Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more books provided for
that purpose; (b) see that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all documents and the execution
of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the Secretary by such
shareholders; (e) sign with the President or a Co-President, or with a Vice President, certificates
for shares of the corporation, or contracts, deeds or mortgages the issuance or execution of which
shall have been authorized by resolution of the Board of Directors; (f) have general charge of the
stock transfer books of the corporation subject to the authority delegated to a transfer agent or
registrar if appointed; and (g) in general perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to the Secretary by the President or any
Co-President, or by the Board of Directors.
Section 8. The Treasurer. The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) receive and give receipts for
monies due and payable to the corporation from any source whatsoever and deposit all such monies in
the name of the corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Article VII of these Bylaws; and (c) in general
perform all of the duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to the Treasurer by the President or any Co-President, or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the Board of Directors
shall determine.
Section 9. Assistant Secretaries and Assistant Treasurers. The Assistant
Secretaries, when authorized by the Board of Directors, may sign with the President or a
Co-President, or with a Vice President, certificates for shares of the corporation or contracts,
deeds or mortgages, the issuance or execution of which shall have been authorized by a resolution
of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their duties in such sums and with such
13
sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or
the Treasurer, respectively, or by the President or any Co-President, or by the Board of Directors.
ARTICLE VI
Contracts, Loans, Checks and Deposits
Contracts, Loans, Checks and Deposits
Section 1. Contracts. The Board of Directors may authorize any officer or officers,
agent or agents, to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation and such authority may be general or confined to specific
instances.
Section 2. Loans. No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by the Board of Directors.
Such authority may be general or confined to specific instances.
Section 3. Checks. Drafts. etc. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be
signed by such officers, agent or agents of the corporation and in such manner as shall from time
to time be determined by the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board of Directors may select.
ARTICLE VII
Certificates for Shares and Their Transfer
Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing shares of the
corporation shall be in such form as shall be determined by the Board of Directors; provided that
any shares of the corporation may be uncertificated shares, whether upon original issuance,
re-issuance or subsequent transfer. Notwithstanding the foregoing, each holder of uncertificated
shares shall be entitled, upon request, to a certificate representing such shares. Shares
represented by certificates shall be signed by the President (or any Co-President) or a Vice
President and by the Secretary or an Assistant Secretary and sealed with the corporate seal or a
facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a registrar, other than the
corporation itself or one of its employees. If any officer who signed a certificate, either
manually or in facsimile, no longer holds such office when the certificate is issued, the
certificate is nevertheless valid. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares represented thereby
are issued, with the number of shares and date of issue, shall be entered on the stock transfer
books of the corporation. All certificates surrendered to the corporation for transfer shall be
canceled and no new certificate, or, upon request, evidence of the equivalent
14
uncertificated shares, shall be issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new
one may be issued therefor upon such terms and indemnity to the corporation as the Board of
Directors may prescribe. Upon receipt of proper transfer instructions from the holder of
uncertificated shares, the corporation shall cancel such
uncertificated shares and issue new equivalent uncertificated shares, or, upon such holder’s
request, certificated shares, to the person entitled thereto, and record the transaction upon its
books. Except as otherwise provided by law, the rights and obligations of the holders of
uncertificated shares and the rights and obligations of the holders of certificated shares shall be
identical.
Section 2. Transfer of Shares. Transfer of shares of the corporation shall be made
only on the stock transfer books of the corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to transfer or by his attorney
thereunto authorized by power of attorney duly executed and filed with the Secretary of the
corporation, or with its transfer agent, if any, and on surrender for cancellation of the
certificate for such shares or upon proper instructions from the holder of uncertificated shares.
The person in whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
ARTICLE VIII
Fiscal Year
Fiscal Year
The fiscal year of the corporation shall begin in January or February and end in January or
February each year, based upon the 4-5-4 calendar as defined by the National Retail Federation
(“NRF”).
ARTICLE IX
Dividends
Dividends
The Board of Directors may, from time to time, declare and the corporation may pay dividends
on its outstanding shares in the manner and upon the terms and conditions provided by law and its
articles of incorporation.
ARTICLE X
Corporate Seal
Corporate Seal
The Board of Directors shall provide a corporate seal which shall be circular in form and
shall have inscribed thereon the name of the corporation and the state of incorporation and the
words, “Corporate Seal.”
ARTICLE XI
Indemnification of Directors, Officers and Others
Indemnification of Directors, Officers and Others
15
Section 1. Right to Indemnification. Each person (including a person’s personal
representative) who was or is made a party or is threatened to be made a party to or is otherwise
involved (including, without limitation, as a witness) in any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative, investigative or by or in the
right of the corporation, or otherwise (hereinafter a “proceeding”) by reason of the fact that he
or she (or a person of whom he or she is a personal representative) is or was a
director or officer of the corporation or an officer of a division of the corporation, or, while
serving as a director or officer of the corporation or an officer of a division of the corporation,
is or was acting at the request of the corporation as a director, officer, partner, trustee,
employee, agent or in any other relationship or capacity whatsoever, of any other foreign or
domestic corporation, partnership, joint venture, employee benefit plan or trust or other trust,
enterprise or other private or governmental entity, agency, board, commission, body or other unit
whatsoever (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action or
inaction in an official capacity as a director, officer, partner, trustee, employee, agent or in
any other relationship or capacity whatsoever, shall be indemnified and held harmless by the
corporation against all expenses, liabilities and losses (including but not limited to attorneys’
fees, judgments, claims, fines, ERISA and other excise and other taxes and penalties and other
adverse effects and amounts paid in settlement), reasonably incurred or suffered by the indemnitee;
provided, however, that except as provided in Section 2 of this Article with respect to suits
relating to rights to indemnification, the corporation shall indemnify any indemnitee in connection
with a proceeding (or part thereof) initiated by the indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the corporation.
No indemnification shall be provided to any indemnitee for acts or omissions of such person finally
adjudged to be intentional misconduct or a knowing violation of law, or from or on account of
conduct of an indemnitee finally adjudged to be in violation of RCW 23B.08.310, or from or on
account of any transaction with respect to which it was finally adjudged that such indemnitee
personally received a benefit in money, property, or services to which the person was not legally
entitled. Notwithstanding the foregoing, if Section 23B.08.560 or any successor provision of the
Washington Business Corporation Act is hereafter amended, the restrictions on indemnification set
forth in this Section shall be as set forth in such amended statutory provision.
The right to indemnification granted in this Article is a contract right and includes the right to
payment by, and the right to receive reimbursement from, the corporation of all expenses as they
are incurred in connection with any proceeding in advance of its final disposition (hereinafter an
“advance of expenses”); provided, however, that an advance of expenses received by an indemnitee in
his or her capacity as a director or officer of the corporation, as an officer of a division of the
corporation, or, acting at the request of the corporation, as director or officer of any other
foreign or domestic corporation, partnership, joint venture, employee benefit plan or trust or
other trust, enterprise or other private or governmental entity, agency, board, commission, body or
other unit whatsoever (and not in any other capacity in which service was or is rendered by such
indemnitee unless such service was authorized by the Board of Directors) shall be made only upon
(i) receipt by the corporation
16
of a written undertaking (hereinafter an “undertaking”) by or on
behalf of such indemnitee, to repay advances of expenses if and to the extent it shall ultimately
be determined by order of a court having jurisdiction (which determination shall become final upon
expiration of all rights to appeal), hereinafter a “final adjudication”, that the indemnitee is not
entitled to be indemnified for such expenses under this Article, (ii) receipt by the corporation of
written affirmation by the indemnitee of his or her good faith belief that he or she has met the
standard of conduct applicable (if any) under the Washington Business Corporation Act necessary for
indemnification by the corporation under this Article, and (iii) a determination of the Board of
Directors, in its good faith belief, that the indemnitee has met the standard of conduct applicable
(if any) under the Washington Business Corporation Act necessary for indemnification by the
corporation under this Article.
Section 2. Right of Indemnitee to Bring Suit. If any claim for indemnification under
Section 1 of this Article is not paid in full by the corporation within sixty days after a written
claim has been received by the corporation, except in the case of a claim for an advance of
expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time
thereafter bring suit against the corporation to recover the unpaid amount of the claim. If the
indemnitee is successful in whole or in part in any such suit, or in any suit in which the
corporation seeks to recover an advance of expenses, the corporation shall also pay to the
indemnitee all the indemnitee’s expenses in connection with such suit. The indemnitee shall be
presumed to be entitled to indemnification under this Article upon the corporation’s receipt of
indemnitee’s written claim (and in any suits relating to rights to indemnification where the
required undertaking and affirmation have been received by the corporation) and thereafter the
corporation shall have the burden of proof to overcome that presumption. Neither the failure of
the corporation (including its Board of Directors, independent legal counsel, or shareholders) to
have made a determination prior to other commencement of such suit that the indemnitee is entitled
to indemnification, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel or shareholders) that the indemnitee is not entitled to
indemnification, shall be a defense to the suit or create a presumption that the indemnitee is not
so entitled. It shall be a defense to a claim for an amount of indemnification under this Article
(other than a claim for advances of expenses prior to final disposition of a proceeding where the
required undertaking and affirmation have been received by the corporation) that the claimant has
not met the standards of conduct applicable (if any) under the Washington Business Corporation Act
to entitle the claimant to the amount claimed, but the corporation shall have the burden of proving
such defense. If requested by the indemnitee, determination of the right to indemnity and amount
of indemnity shall be made by final adjudication (as defined above) and such final adjudication
shall supersede any determination made in accordance with RCW 23B.08.550.
Section 3. Non-Exclusivity of Rights. The rights to indemnification (including, but
not limited to, payment, reimbursement and advances of expenses) granted in this Article shall not
be exclusive of any other powers or obligations of the corporation or of any other rights which any
person may have or hereafter acquire under any statute, the common law, the corporation’s Articles
of Incorporation or Bylaws, agreement, vote of shareholders or disinterested directors, or
otherwise. Notwithstanding any amendment to or repeal of this
17
Article XI, the rights to
indemnification for an indemnitee under this Article XI shall vest at the time the indemnitee first
becomes a director, officer, partner, trustee, employee, agent or in any other relationship or
capacity whatsoever and no repeal or amendment of, or adoption of any provision inconsistent with
this Article XI shall adversely affect any rights to indemnification granted to an indemnitee
pursuant hereto existing at, arising out of, or related to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
Section 4. Insurance, Contracts and Funding. The corporation may purchase and
maintain insurance, at its expense, to protect itself and any person (including a person’s personal
representative) who is or was a director, officer, employee or agent of the corporation or who is
or was a director, officer, partner, trustee, employee, agent, or in any other relationship or
capacity whatsoever, of any other foreign or domestic corporation, partnership, joint venture,
employee benefit plan or trust or other trust, enterprise or other private or governmental entity,
agency, board, commission, body or other unit whatsoever, against any expense, liability or loss,
whether or not the power to indemnify such person against such expense, liability or loss is now or
hereafter granted to the corporation under the Washington Business Corporation Act. The
corporation may enter into contracts granting indemnity, to any such person whether or not in
furtherance of the provisions of this Article and may create trust funds, grant security interests
and use other means (including, without limitation, letters of credit) to secure and ensure the
payment of indemnification amounts.
Section 5. Indemnification of Employees and Agents. The corporation may, by action
of the Board of Directors, provide indemnification and pay expenses in advance of the final
disposition of a proceeding to employees and agent of the corporation with the same scope and
effect as the provisions of this Article with respect to the indemnification and advancement of
expenses of directors and officers of the corporation or pursuant to rights granted under, or
provided by, the Washington Business Corporation Act or otherwise.
Section 6. Separability of Provisions. If any provision or provisions of this
Article shall be held to be invalid, illegal or unenforceable for any reason whatsoever (i) the
validity, legality and enforceability of the remaining provisions of this Article (including
without limitation, all portions of any sections of this Article containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Article (including, without limitation, all portions of any paragraph of this
Article containing any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
Section 7. Partial Indemnification. If an indemnitee is entitled to indemnification
by the corporation for some or a portion of expenses, liabilities or losses, but not for the total
amount thereof, the corporation shall nevertheless indemnify the indemnitee for the portion of such
expenses, liabilities and losses to which the indemnitee is entitled.
18
Section 8. Successors and Assigns. All obligations of the corporation to indemnify
(including, but not limited to, payment, reimbursement and advances of expenses) any indemnitee:
(i) shall be binding upon all successors and assigns of the corporation (including any transferee
of all or substantially all of its assets and any successor by merger or otherwise by operation of
law), (ii) shall be binding on and inure to the benefit of the spouse, heirs, personal
representatives and estate of the indemnitee, and (iii) shall continue as to any
indemnitee who has ceased to be a director, officer, partner, trustee, employee or agent (or other
relationship or capacity).
ARTICLE XII
Books and Records
Books and Records
Section 1. Books of Accounts, Minutes and Share Register. The corporation shall keep
as permanent records minutes of all meetings of its shareholders and Board of Directors, a record
of all actions taken by the shareholders or Board of Directors without a meeting and a record of
all actions taken by a committee of the Board of Directors exercising the authority of the Board of
Directors on behalf of the corporation. The corporation shall maintain appropriate accounting
records. The corporation or its agent shall maintain a record of its shareholders, in a form that
permits preparation of a list of the names and addresses of all shareholders, in alphabetical order
showing the number and class of shares held by each. The corporation shall keep a copy of the
following records at its principal office: the Articles or Restated Articles of Incorporation and
all amendments currently in effect; the Bylaws or Restated Bylaws and all amendments currently in
effect; the minutes of all shareholders’ meetings and records of all actions taken by shareholders
without a meeting, for the past three years; its financial statements for the past three years,
including balance sheets showing in reasonable detail the financial condition of the corporation as
of the close of each fiscal year and an income statement showing the results of its operations
during each fiscal year prepared on the basis of generally accepted accounting principles or, if
not, prepared on a basis explained therein; all written communications to shareholders generally
within the past three years; a list of the names and business addresses of its current directors
and officers; and its most recent annual report delivered to the Secretary of State of the State of
Washington.
Section 2. Copies of Resolutions. Any person dealing with the corporation may rely
upon a copy of any of the records of the proceedings, resolutions, or votes of the Board of
Directors or shareholders, when certified by the President (or any Co-President) or Secretary.
ARTICLE XIII
Amendment of Bylaws
Amendment of Bylaws
These Bylaws may be amended, altered, or repealed by the affirmative vote of a majority of the
full Board of Directors at any regular or special meeting of the Board of Directors.
19
Exhibit 10.1
Nordstrom, Inc.
2004 Equity Incentive Plan
(2008 Amendment)
(2008 Amendment)
Lane Powell PC
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200
TABLE OF CONTENTS
| Page | ||||
ARTICLE 1. INTRODUCTION |
1 | |||
ARTICLE 2. ADMINISTRATION |
1 | |||
2.1 Committee Composition |
1 | |||
2.2 Committee Responsibilities |
1 | |||
2.3 Committee for Non-Officer/Director Grants |
1 | |||
ARTICLE 3. SHARES AVAILABLE FOR GRANTS |
2 | |||
3.1 Basic Limitation |
2 | |||
3.2 Share Sub-limitations |
2 | |||
3.3 Additional Shares |
2 | |||
ARTICLE 4. ELIGIBILITY |
2 | |||
4.1 Grants |
3 | |||
4.2 Incentive Stock Options |
3 | |||
ARTICLE 5. OPTIONS |
3 | |||
5.1 Stock Option Agreement |
3 | |||
5.2 Number of Shares |
3 | |||
5.3 Exercise Price |
3 | |||
5.4 Exercisability and Term |
3 | |||
5.5 Effect of Change in Control |
3 | |||
5.6 Modification or Assumption of Options/No Repricing |
4 | |||
ARTICLE 6. PAYMENT FOR OPTION SHARES |
4 | |||
6.1 General Rule |
4 | |||
6.2 Stock Swap |
4 | |||
6.3 Exercise/Sale |
4 | |||
6.4 Exercise/Pledge |
4 | |||
ARTICLE 7. STOCK APPRECIATION RIGHTS |
4 | |||
7.1 SAR Agreement |
5 | |||
7.2 Number of Shares |
5 | |||
7.3 Exercise Price |
5 | |||
7.4 Exercisability and Term |
5 | |||
7.5 Effect of Change in Control |
5 | |||
7.6 Exercise of SARs |
5 | |||
7.7 Modification or Assumption of SARs/No Repricing |
5 | |||
ARTICLE 8. UNRESTRICTED SHARES |
6 | |||
8.1 Unrestricted Stock |
6 | |||
8.2 Payment for Awards |
6 | |||
ARTICLE 9. RESTRICTED SHARES |
6 | |||
9.1 Restricted Share Agreement |
6 | |||
i
| Page | ||||
9.2 Payment for Awards |
6 | |||
9.3 Vesting Conditions |
6 | |||
9.4 Voting and Dividend Rights |
7 | |||
ARTICLE 10. RESTRICTED STOCK UNITS |
7 | |||
10.1 Restricted Stock Units |
8 | |||
10.2 Restricted Stock Unit Agreement |
8 | |||
10.3 Payment for Awards |
8 | |||
10.4 Vesting Conditions |
8 | |||
10.5 Voting and Dividend Rights |
9 | |||
10.6 Form and Time of Settlement of Restricted Stock Unit Awards |
9 | |||
10.7 Creditors’ Rights |
10 | |||
ARTICLE 11. PERFORMANCE SHARE UNITS |
10 | |||
11.1 Performance Share Units |
10 | |||
11.2 Agreement |
10 | |||
11.3 Payment for Awards |
10 | |||
11.4 Vesting Conditions |
10 | |||
11.5 Voting and Dividend Rights |
11 | |||
11.6 Form and Time of Settlement of Units |
11 | |||
11.7 Creditors’ Rights |
12 | |||
ARTICLE 12. PROTECTION AGAINST DILUTION |
12 | |||
12.1 Adjustments |
12 | |||
12.2 Dissolution or Liquidation |
13 | |||
ARTICLE 13. AWARDS UNDER OTHER PLANS |
13 | |||
ARTICLE 14. LIMITATION ON RIGHTS |
13 | |||
14.1 Retention Rights |
13 | |||
14.2 Shareholders’ Rights |
13 | |||
14.3 Regulatory Requirements |
13 | |||
14.3 Compliance with Code Section 409A |
13 | |||
ARTICLE 15. WITHHOLDING TAXES |
14 | |||
15.1 General |
14 | |||
15.2 Share Withholding |
14 | |||
ARTICLE 16. FUTURE OF THE PLAN |
14 | |||
16.1 Term of the Plan |
14 | |||
16.2 Amendment or Termination |
14 | |||
ARTICLE 17. DEFINITIONS |
14 | |||
ii
Nordstrom, Inc.
2004 Equity Incentive Plan
(2008 Amendment)
2004 Equity Incentive Plan
(2008 Amendment)
ARTICLE 1. INTRODUCTION
The purpose of the Plan is to promote the long-term success of the Company and its
subsidiaries and the creation of shareholder value by (a) encouraging Employees and Non-Employee
Directors to focus on critical long-range objectives, (b) encouraging the attraction and retention
of Employees and Non-Employee Directors with exceptional qualifications and (c) linking Employees
and Non-Employee Directors directly to shareholder interests through stock ownership. The Plan
seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute
incentive stock options (ISOs) or nonqualified stock options (NSOs)), stock appreciation rights
(SARs), Unrestricted Shares, Restricted Shares, Restricted Stock Units and Performance Share Units.
The Plan was originally approved by the Board and the Shareholders of the Company in 2004, was
amended in 2007 to accomplish the changes necessary to keep the Plan compliant with Code Section
409A and also to make other administrative and clarifying changes to the Plan and the Plan is
hereby amended effective November 19, 2008, to permit Restricted Stock Units to be awarded to
Employees and Non-Employee Directors and to make further administrative and clarifying changes to
the Plan.
The Plan shall be governed by, and construed in accordance with, the laws of the State of
Washington (except their choice of law provisions).
ARTICLE 2. ADMINISTRATION
2.1 Committee Composition. The Committee shall administer the Plan. The Committee shall
consist exclusively of two or more directors of the Company, who shall be appointed by the Board.
2.2 Committee Responsibilities. The Committee shall (a) select the Employees and Non-Employee
Directors who are to receive Awards under the Plan, (b) determine the type, number, vesting
requirements and other features and conditions of such Awards, (c) interpret the Plan and (d) make
all other decisions relating to the operation of the Plan. The Committee may adopt such rules or
guidelines as it deems appropriate to implement the Plan. The Committee’s determinations under the
Plan shall be final and binding on all persons.
2.3 Committee for Non-Officer/Director Grants. The Board may also appoint a secondary
committee of the Board or a senior executive officer to administer the Plan with respect to
Employees who are not
considered officers or directors of the Company under Section 16 of the Exchange Act. That
committee or senior executive officer may grant Awards under the Plan to such Employees and may
determine all features and conditions of such
1
Awards. Within the limitations of this Section 2.3,
any reference in the Plan to the Committee shall include such secondary committee or senior
executive officer, as the case may be.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS
3.1 Basic Limitation. Shares issued pursuant to the Plan shall be authorized but unissued
shares. The aggregate number of Options, SARs, Unrestricted Shares, Restricted Shares, Restricted
Stock Units or Performance Share Units awarded under the Plan shall not exceed (a) 6,185,476 plus
(b) the additional shares of Common Stock described in Section 3.3 plus (c) the 2,814,524 shares of
Common Stock that, as of March 17, 2004, were available for issuance under the Company’s 1997 Stock
Option Plan (the “Prior Plan”) or that thereafter become available for issuance under the Prior
Plan in accordance with its terms as in effect on such date. The limitations of this Section 3.1
and Section 3.2 shall be subject to adjustment pursuant to Article 12.
3.2 Share Sub-limitations. The aggregate number of Unrestricted Shares awarded under the Plan
shall not exceed 1,000,000.
3.3 Additional Shares. If Restricted Shares are forfeited, then such Restricted Shares shall
again become available for Awards under the Plan. If Options, SARs, Restricted Stock Units or
Performance Share Units are forfeited or terminate for any other reason before being exercised,
then the corresponding shares of Common Stock shall again become available for Awards under the
Plan. If Restricted Stock Units are settled, then only the number of shares of Common Stock (if
any) actually issued in settlement of such Restricted Stock Units, or relinquished for satisfaction
of tax obligations arising as a result of such settlement, shall reduce the number available under
Sections 3.1 and 3.2 and the balance shall again become available for Awards under the Plan. If
Performance Share Units are settled, then only the number of shares of Common Stock (if any)
actually issued in settlement of such Performance Share Units, or relinquished for satisfaction of
tax obligations arising as a result of such settlement, shall reduce the number available under
Sections 3.1 and 3.2 and the balance shall again become available for Awards under the Plan. If
SARs are exercised, then only the number of shares of Common Stock (if any) actually issued in
settlement of such SARs, or relinquished for satisfaction of tax obligations arising as a result of
such settlement, shall reduce the number available under Sections 3.1 and 3.2 and the balance shall
again become available for Awards under the Plan. If dividend equivalents are granted, then only
the number of shares of Common Stock (if any) actually issued with respect to such rights, or
relinquished for satisfaction of tax obligations arising as a result of such issuance, shall reduce
the number available under Sections 3.1 and 3.2. Shares that are exchanged by a Participant or
withheld by the Company as full or partial payment in connection with any exercise price under any
Award under the Plan shall be available for subsequent Awards under the Plan. The foregoing
notwithstanding, the aggregate number of shares of Common Stock that may be issued under the
Plan upon the exercise of ISOs shall not be increased when Restricted Shares, Unrestricted Shares
or other shares of Common Stock are forfeited.
ARTICLE 4. ELIGIBILITY
2
4.1 Grants. Employees and Non-Employee Directors shall be eligible for the grant of NSOs,
SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units.
4.2 Incentive Stock Options. Only Employees who are common-law employees of the Company or a
Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than
10% of the total combined voting power of all classes of outstanding stock of the Company or any of
its Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in
section 422(c)(6) of the Code are satisfied.
ARTICLE 5. OPTIONS
Options granted under the Plan are subject to the following terms and conditions:
5.1 Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a
Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not inconsistent with
the Plan. The Stock Option Agreement shall specify whether the Option is an NSO or an ISO. The
provisions of the various Stock Option Agreements entered into under the Plan need not be
identical.
5.2 Number of Shares. Each Stock Option Agreement shall specify the number of shares of
Common Stock subject to the Option, which shall be subject to adjustment in accordance with Article
12. Options granted to any Employee in a single fiscal year of the Company shall not cover more
than 250,000 shares of Common Stock. The limitation set forth in the preceding sentence shall be
subject to adjustment in accordance with Article 12.
5.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise Price; provided
that the Exercise Price under an Option shall in no event be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant.
5.4 Exercisability and Term. Each Stock Option Agreement shall specify the date or event when
all or any installment of the Option is to become exercisable. The Stock Option Agreement shall
also specify the term of the Option; provided that the term of an ISO shall in no event exceed ten
(10) years from the date of grant.
A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s
death, disability or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee’s Service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not be exercisable
unless the related SARs are forfeited.
5.5 Effect of Change in Control. The Committee may determine, at the time of granting an
Option or thereafter, in a manner that meets the requirements of Code Section 409A, that such
Option shall become exercisable as to all or part of the shares of Common Stock subject to such
Option in the event that a Change in Control occurs with respect to the Company.
3
However, in the
case of an ISO, the acceleration of exercisability shall not occur without the Optionee’s written
consent. In addition, acceleration of exercisability may be required under Section 12.1.
5.6 Modification or Assumption of Options/No Repricing. Within the limitations of the Plan,
the Committee may modify Options, or assume outstanding options granted by another issuer, provided
that no Option shall be repriced. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES
6.1 General Rule. The entire Exercise Price of shares of Common Stock issued upon exercise of
Options shall be payable in cash or cash equivalents at the time when such shares of Common Stock
are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be made only pursuant to the
express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may
specify that payment may be made in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time accept payment in any form(s)
described in this Article 6.
6.2 Stock Swap. To the extent that this Section 6.2 is applicable, all or any part of the
Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common
Stock that are already owned by the Optionee. Such shares of Common Stock shall be valued at their
Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan. If
originally received pursuant to any Company benefit plan, shares of Common Stock swapped in payment
of the Exercise Price must have been held by the Optionee for at least six (6) months.
6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable, all or any part of the
Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the
Company) an irrevocable direction to a securities
broker approved by the Company to sell all or part of the shares of Common Stock being purchased
under the Plan and to deliver all or part of the sales proceeds to the Company.
6.4 Exercise/Pledge. To the extent that this Section 6.4 is applicable, all or any part of
the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the
Company) an irrevocable direction to pledge all or part of the shares of Common Stock being
purchased under the Plan to a securities broker or lender approved by the Company, as security for
a loan, and to deliver all or part of the loan proceeds to the Company.
ARTICLE 7. STOCK APPRECIATION RIGHTS
4
SARs granted under the Plan are subject to the following terms and conditions:
7.1 SAR Agreement. Each grant of an SAR under the Plan shall be evidenced by an SAR Agreement
between the Participant and the Company. Such SAR shall be subject to all applicable terms of the
Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions
of the various SAR Agreements entered into under the Plan need not be identical.
7.2 Number of Shares. Each SAR Agreement shall specify the number of shares of Common Stock
to which the SAR pertains and shall provide for the adjustment of such number in accordance with
Article 12. SARs granted to any Participant in a single calendar year shall in no event pertain to
more than 250,000 shares of Common Stock. The limitation set forth in the preceding sentence shall
be subject to adjustment in accordance with Article 12.
7.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price; provided that the
Exercise Price under an SAR shall in no event be less than 100% of the Fair Market Value of a share
of Common Stock on the date of grant.
7.4 Exercisability and Term. Each SAR Agreement shall specify the date when all or any
installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of
the SAR. An SAR Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, disability or retirement or other events and may provide for expiration prior to
the end of its term in the event of the termination of the Optionee’s Service. SARs may be awarded
in combination with Options, and such an Award may provide that the SARs will not be exercisable
unless the related Options are forfeited.
7.5 Effect of Change in Control. The Committee may determine, at the time of granting an SAR
or thereafter, that such SAR shall become fully exercisable as to all shares of Common Stock
subject to such SAR in the event that
the Company is subject to a Change in Control. In addition, acceleration of exercisability may be
required under Section 12.1.
7.6 Exercise of SARs. Upon exercise of an SAR, the Participant (or any person having the
right to exercise the SAR after his or her death) shall receive from the Company (a) shares of
Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee
shall determine. The amount of cash and/or the Fair Market Value of shares of Common Stock
received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair
Market Value (on the date of surrender) of the shares of Common Stock subject to the SARs exceeds
the Exercise Price.
7.7 Modification or Assumption of SARs/No Repricing. Within the limitations of the Plan, the
Committee may modify SARs, or assume outstanding stock appreciation rights granted by another
issuer, provided that no SAR shall be repriced. The foregoing notwithstanding, no modification of
an SAR shall, without the consent of the Optionee, alter or impair his or her rights or obligations
under such SAR.
5
ARTICLE 8. UNRESTRICTED SHARES
Unrestricted Shares granted under the Plan are subject to the following terms and conditions:
8.1 Unrestricted Stock. The Committee may grant up to 1,000,000 shares of Common Stock that
have no restrictions. Such Unrestricted Shares shall be subject to all applicable terms of the
Plan and may be subject to any other terms that are not inconsistent with the Plan. In no event
shall the number of Unrestricted Shares that are granted to any Participant in a single fiscal year
exceed 50,000, subject to adjustment in accordance with Article 12.
8.2 Payment for Awards. Unrestricted Shares may be awarded under the Plan for such
consideration consisting of any tangible or intangible property or benefit to the Company as the
Committee may determine, including cash, promissory notes, services performed and contracts for
services to be performed.
ARTICLE 9. RESTRICTED SHARES
Restricted Shares granted under the Plan are subject to the following terms and conditions:
9.1 Restricted Share Agreement. Each grant of Restricted Shares under the Plan shall be
evidenced by a Restricted Share Agreement between the recipient and the Company. Such Restricted
Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms
that are not inconsistent
with the Plan. The provisions of the various Restricted Share Agreements entered into under the
Plan need not be identical.
9.2 Payment for Awards. Restricted Shares may be awarded under the Plan for such
consideration consisting of any tangible or intangible property or benefit to the Company as the
Committee may determine, including cash, promissory notes, services performed and contracts for
services to be performed.
9.3 Vesting Conditions. Each Award of Restricted Shares shall be subject to vesting. Vesting
shall occur, in full or in installments, upon satisfaction of the conditions specified in the
Restricted Share Agreement. If the only restriction on an Award of Restricted Shares is vesting
based on the lapse of time, the minimum period for full vesting shall be six (6) months. The
Committee may include among such conditions the requirement that the performance of the Company or
a business unit of the Company for at least a one-year period equal or exceed a target determined
in advance by the Committee. Such target shall be based on any one or combination of the following
performance criteria:
(a) achievement of a specified percentage increase or quantitative level in the Company’s
shareholder return as compared to a comparator group,
(b) achievement of a specified percentage increase or quantitative level in the trading price
of the Company’s Common Stock,
6
(c) achievement of a specified percentage increase or quantitative level in the results of
operations, such as sales, earnings, cash flow, economic profit or return on investment (including
return on equity, return on invested capital or return on assets) of the Company or of a subsidiary
or division or other segment of the Company for which the Participant has responsibilities,
(d) achievement of a specified percentage increase or quantitative level in the other
financial results, such as profit margins, expense reduction or asset management goals of the
Company or of a subsidiary or division or other segment of the Company for which the Participant
has responsibilities, or
(e) achievement of a specified percentage increase or quantitative level in the internal or
external market share of a product or line of products. The Committee shall identify such
conditions not later than the 90th day of such period, and before 25% of such period has
elapsed. The Committee shall certify in writing prior to payout that such conditions and any other
material terms were in fact satisfied. Approved minutes of a meeting of the Committee may be
treated as such written certification.
In no event shall the number of Restricted Shares which are subject to performance-based vesting
conditions and which are granted to any Participant in a single fiscal year exceed 250,000, subject
to adjustment in accordance with Article 12.
If the Participant’s employment with the Company or Subsidiary is terminated before the end of the
period of time, designated by the Committee, over which Restricted Shares may be earned (a
“Performance Cycle”) for any reason other than retirement, disability, or death, the Participant
shall forfeit all rights with respect to any Restricted Shares that were being earned during the
Performance Cycle. The Committee, in its sole discretion, may establish guidelines providing that
if a Participant’s employment is terminated before the end of a Performance Cycle by reason of
retirement, disability, or death, the Participant shall be entitled to a prorated payment with
respect to any shares of Restricted Stock that were being earned during the Performance Cycle.
Alternatively, a Restricted Share Agreement may provide for accelerated vesting in the event of the
Participant’s death, disability or retirement or other events. The Committee may determine, at the
time of granting Restricted Shares or thereafter, that all or part of such Restricted Shares shall
become vested in the event that a Change in Control occurs with respect to the Company or in the
event that the Participant is subject to an Involuntary Termination after a Change in Control.
9.4 Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall
have the voting, dividend and other rights as set forth in their Restricted Share Agreement, and
may have the same voting, dividend and other rights as the Company’s other shareholders. A
Restricted Share Agreement may require that the holders of Restricted Shares invest any cash
dividends received in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to which the dividends
were paid.
ARTICLE 10. RESTRICTED STOCK UNITS
7
Restricted Stock Units granted under the Plan are subject to the following terms and conditions:
10.1 Restricted Stock Units. Restricted Stock Units are designated in shares of Common Stock.
10.2 Restricted Stock Unit Agreement. Each grant of Restricted Stock Units under the Plan
shall be evidenced by a Restricted Stock Unit Agreement between the recipient and the Company.
Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject
to any other terms of the applicable Restricted Stock Unit Agreement that are not inconsistent with
the Plan. The provisions of the various Restricted Stock Unit Agreements entered into under the
Plan need not be identical.
10.3 Payment for Awards. To the extent that an Award is granted in the form of Restricted
Stock Units, no cash consideration shall be required of the Award recipients.
10.4 Vesting Conditions. Each Award of Restricted Stock Units shall be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in
the Restricted Stock Unit Agreement. If the only restriction on an Award of Restricted Stock Units
is vesting based on the lapse of time, the minimum period for full vesting shall be six (6) months.
The Committee may include among
such conditions the requirement that the performance of the Company or a business unit of the
Company for at least a one-year period equal or exceed a target determined in advance by the
Committee. Such target shall be based on any one or combination of the following performance
criteria:
(a) achievement of a specified percentage increase or quantitative level in the Company’s
shareholder return as compared to a comparator group,
(b) achievement of a specified percentage increase or quantitative level in the trading price
of the Company’s Common Stock,
(c) achievement of a specified percentage increase or quantitative level in the results of
operations, such as sales, earnings, cash flow, economic profit or return on investment (including
return on equity, return on invested capital or return on assets) of the Company or of a subsidiary
or division or other segment of the Company for which the Participant has responsibilities,
(d) achievement of a specified percentage increase or quantitative level in the other
financial results, such as profit margins, expense reduction or asset management goals of the
Company or of a subsidiary or division or other segment of the Company for which the Participant
has responsibilities, or
(e) achievement of a specified percentage increase or quantitative level in the internal or
external market share of a product or line of products. The Committee shall identify such
conditions not later than the 90th day of such period, and before 25% of such period has
elapsed. The Committee shall certify in writing prior to payout that such conditions and any other
material terms were in fact satisfied. Approved minutes of a meeting of the Committee may be
treated as such written certification.
8
In no event shall the number of Restricted Stock Units which are subject to performance-based
vesting conditions and which are granted to any Participant in a single fiscal year exceed 250,000,
subject to adjustment in accordance with Article 12.
If the Participant’s employment with the Company or Subsidiary is terminated before the end of the
period of time, designated by the Committee, over which Restricted Stock Units may be earned (a
“Performance Cycle”) for any reason other than retirement, disability, or death, the Participant
shall forfeit all rights with respect to any Restricted Stock Units that were being earned during
the Performance Cycle. The Committee, in its sole discretion, may establish guidelines providing
that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of
retirement, disability, or death, the Participant shall be entitled to a prorated payment with
respect to any shares of Restricted Stock Units that were being earned during the Performance
Cycle. Alternatively, a Restricted Stock Unit Agreement may provide for accelerated vesting in the
event of the Participant’s death, disability or retirement or other events. The Committee may
determine, at the time of granting Restricted Stock Units or thereafter, that all or part of such
Restricted Stock Units shall become vested in the event that a Change in Control occurs with
respect to the Company or in the event that the Participant is subject to an Involuntary
Termination after a Change in Control.
10.5 Voting and Dividend Rights. The holders of Restricted Stock Units awarded under the Plan
shall have no voting rights with respect to shares of Common Stock represented by Restricted Stock
Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company). Dividend equivalents
may be credited in respect of shares of Common Stock covered by an Award of Restricted Stock Units,
as determined by the Committee and contained in the Restricted Stock Unit Agreement. At the sole
discretion of the Committee, such dividend equivalents may be converted into additional shares of
Common Stock covered by the Award of Restricted Stock Units in such manner as determined by the
Committee. Any additional shares covered by the Restricted Stock Unit Agreement credited by reason
of such dividend equivalents shall be subject to the same conditions and restrictions as the Award
with respect to which the dividends were made.
10.6 Form and Time of Settlement of Restricted Stock Unit Awards. Settlement of vested
Restricted Stock Units may be made in the form of (a) cash, (b) shares of Common Stock (c) any
combination of both, as determined by the Committee. For the avoidance of doubt, settlement of
vested Restricted Stock Units in shares of Common Stock shall not be considered an Award of
Unrestricted Shares under Article 8. Methods of converting Restricted Stock Units into cash may
include (without limitation) a method based on the average Fair Market Value of shares of Common
Stock over a series of trading days. Vested Restricted Stock Units shall be settled in a lump sum
before the later of (i) two and one half (2 1/2) months after the end of the Company’s fiscal year
during in which all vesting conditions applicable to the Restricted Stock Units have been satisfied
or have lapsed or (ii) March 15 following the calendar year in which all vesting conditions
applicable to the Restricted Stock Units have been satisfied or have lapsed. Until an Award of
Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to
adjustment pursuant to Article 12.
9
10.7 Creditors’ Rights. A holder of Restricted Stock Units shall have no rights other than
those of a general creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the applicable
Restricted Stock Unit Agreement.
ARTICLE 11. PERFORMANCE SHARE UNITS
Performance Share Units granted under the Plan are subject to the following terms and conditions:
11.1 Performance Share Units. Performance Share Units are designated in shares of Common
Stock.
11.2 Agreement. Each grant of Performance Share Units under the Plan shall be evidenced by an
Agreement between the recipient and the Company, shall be subject to all applicable terms of the
Plan, and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various Performance Share
Unit Agreements entered into under the Plan need not be identical. Performance Share Units may be
granted in consideration of a reduction in the recipient’s other compensation.
11.3 Payment for Awards. To the extent that an Award is granted in the form of Performance
Share Units no cash consideration shall be required of the Award recipients.
11.4 Vesting Conditions. Each Award of Performance Share Units shall be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in
the Performance Share Unit Agreement. If the only restriction on an Award of Performance Share
Units is vesting based on the lapse of time, the minimum period for full vesting shall be three
years. The Committee may include among such conditions, the requirement that the performance of
the Company or a business unit of the Company for at least a one-year period (a “Performance
Cycle”) equal or exceed a target determined in advance by the Committee. Such target shall be
based on any one or combination of the following performance criteria:
(a) achievement of a specified percentage increase or quantitative level in the Company’s
shareholder return as compared to a comparator group,
(b) achievement of a specified percentage increase or quantitative level in the trading price
of the Company’s Common Stock,
(c) achievement of a specified percentage increase or quantitative level in the results of
operations, such as sales, earnings, cash flow, economic profit or return on investment (including
return on equity, return on invested capital or return on assets) of the Company or of a subsidiary
or division or other segment of the Company for which the participant has responsibilities,
(d) achievement of a specified percentage increase or quantitative level in the other
financial results, such as profit margins, expense reduction or asset management goals of
10
the Company or of a subsidiary or division or other segment of the Company for which the participant
has responsibilities, or
(e) achievement of a specified percentage increase or quantitative level in the internal or
external market share of a product or line of products. The Committee shall determine such
conditions not later than the 90th day of the Performance Cycle, and before 25% of the
Performance Cycle has elapsed. The Committee shall certify in writing prior to payout that such
conditions and any other material terms were in fact satisfied. Approved minutes of a meeting of
the Committee may be treated as such written certification.
In no event shall the number of Performance Share Units which are subject to performance-based
vesting conditions and which are granted to any Participant in a single fiscal year exceed 250,000,
subject to adjustment in accordance with Article 12.
If the participant’s employment with the Company or Subsidiary is terminated before the date that
Performance Share Units vest, the participant shall forfeit all rights with respect to any unvested
Performance Share Units. However, with respect to Performance Share Units subject
to performance-based vesting conditions, the Committee, in its sole discretion at the time that an
Award of Performance Share Units is made, may establish guidelines providing that if a
participant’s employment is terminated before the end of a Performance Cycle by reason of
retirement, disability, or death, the participant shall be entitled to a prorated payment with
respect to any Performance Share Units that were being earned during the Performance Cycle.
Alternatively, a Performance Share Unit Agreement may provide for accelerated vesting in the event
of the Participant’s death, disability or retirement or other objectively-determinable events. The
Committee may determine, at the time of granting Performance Share Units or thereafter, that all or
part of the Performance Share Units shall become vested in the event that the Company is subject to
a Change in Control or in the event that the Participant is subject to an Involuntary Termination
after a Change in Control. In addition, acceleration of vesting may be required under Section
12.1.
11.5 Voting and Dividend Rights. The holders of Performance Share Units shall have no voting
rights. Prior to settlement or forfeiture, any Performance Share Unit awarded under the Plan may,
at the Committee’s discretion as evidenced in the Agreement, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal to all cash
dividends paid on one share of Common Stock while the Performance Share Unit is outstanding.
Dividend equivalents may be converted into additional Performance Share Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of shares of Common Stock, or in
a combination of both. Prior to distribution, any dividend equivalents that are not paid shall be
subject to the same conditions and restrictions as the Performance Share Units to which they
attach.
11.6 Form and Time of Settlement of Units. Settlement of vested Performance Share Units may
be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as
determined by the Committee. For the avoidance of doubt, settlement of vested Performance Share
Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under
Article 8. Methods of converting Performance Share Units into cash may include (without limitation)
a method based on the average Fair Market Value of shares of
11
Common Stock over a series of trading
days. Vested Performance Share Units shall be settled in a lump sum by the last day of the
calendar year in which all vesting conditions applicable to the Performance Share Units have been
satisfied or have lapsed. Until an Award of Performance Share Units is settled, the number of such
Share Units shall be subject to adjustment pursuant to Article 12.
11.7 Creditors’ Rights. A holder of Performance Share Units shall have no rights other than
those of a general creditor of the Company. Performance Share Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the applicable
Performance Share Unit Agreement.
ARTICLE 12. PROTECTION AGAINST DILUTION
12.1 Adjustments. Upon or in contemplation of any reclassification, recapitalization, stock
split (including a stock split in the form of a share dividend) or reverse stock split (“stock
split”); any merger, combination, consolidation, or other reorganization; any spin-off, split-up,
or similar extraordinary dividend distribution in respect of shares of Common Stock (whether in the
form of securities or property); any exchange of shares of Common Stock or other securities of the
Company, or any similar, unusual or extraordinary corporate transaction in respect of shares of
Common Stock; or a sale of all or substantially all the assets of the Company as an entirety; then
the Committee shall, in such manner, to such extent (if any) and at such time as it deems
appropriate and equitable in the circumstances:
(a) proportionately adjust any or all of (A) the number and type of shares of Common Stock (or
other securities) that thereafter may be made the subject of Awards (including the specific share
limits, maximums and numbers of shares set forth elsewhere in this Plan), (B) the number, amount
and type of shares of Common Stock (or other securities or property) subject to any or all
outstanding Awards, (C) the grant, purchase, or exercise price of any or all outstanding Awards,
(D) the securities, cash or other property deliverable upon exercise of any or all outstanding
Awards, or (E) the performance standards appropriate to any or all outstanding Awards, or
(b) make provision for a cash payment or for the assumption, substitution or exchange of any
or all outstanding share-based Awards or the cash, securities or property deliverable to the holder
of any or all outstanding share-based Awards, based upon the distribution or consideration payable
to holders of the outstanding shares of Common Stock upon or in respect of such event.
The Committee may adopt such valuation methodologies for outstanding Awards as it deems reasonable
in the event of a cash or property settlement and, in the case of Options, SARs or similar rights,
but without limitation on other methodologies, may base such settlement solely upon the excess if
any of the per share amount payable upon or in respect of such event over the grant price of the
Award, unless otherwise provided in, or by authorized amendment to, the Award or provided in
another applicable agreement with the Participant. With respect to any ISO, in the discretion of
the Committee, the adjustment may be made in a manner that would cause the Option to cease to
qualify as an ISO.
12
12.2 Dissolution or Liquidation. To the extent not previously exercised, settled or assumed,
Options, SARs, and Performance Share Units shall terminate immediately prior to the dissolution or
liquidation of the Company.
ARTICLE 13. AWARDS UNDER OTHER PLANS
The Company may grant awards under other plans or programs. Such awards may be settled in the
form of shares of Common Stock issued under this Plan.
ARTICLE 14. LIMITATION ON RIGHTS
14.1 Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed
to give any individual a right to remain an Employee or Non-Employee Director. The Company and its
Subsidiaries reserve the right to terminate the Service of any Employee or Non-Employee Director at
any time, with or without cause, subject to applicable laws, the Company’s Restated Articles of
Incorporation and Bylaws and a written employment agreement (if any).
14.2 Shareholders’ Rights. Unless otherwise provided in this Plan or in any Award, a
Participant shall have no dividend rights, voting rights or other rights as a shareholder with
respect to any shares of Common Stock covered by his or her Award prior to the time when a stock
certificate for such shares of Common Stock is issued or, if applicable, the time when he or she
becomes entitled to receive such shares of Common Stock by filing any required notice of exercise
and paying any required Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly provided in the Plan.
14.3 Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation
of the Company to issue shares of Common Stock under the Plan shall be subject to all applicable
laws, rules and regulations and such approval by any regulatory body as may be required. The
Company reserves the right to restrict, in whole or in part, the delivery of shares of Common Stock
pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance
of such shares of Common Stock related to their registration, qualification or listing or to an
exemption from registration, qualification or listing.
14.4 Compliance with Code Section 409A. Awards under the Plan are intended to comply with
Code Section 409A and all Awards shall be interpreted in a manner that results in compliance with
Section 409A, Department of Treasury regulations, and other interpretive guidance under Section
409A. Notwithstanding any provision of the Plan or an Award to the contrary, if the Committee
determines that any Award does not comply with Code Section 409A, the Company may adopt such
amendments to the Plan and the affected Award (without consent of the Participant) or adopt other
policies or procedures (including amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are necessary and appropriate to (a) exempt
the Plan and the Award from application of Code
13
Section 409A and/or preserve the intended tax
treatment of amounts payable with respect to the Award, or (b) comply with the requirements of Code
Section 409A.
ARTICLE 15. WITHHOLDING TAXES
15.1 General. To the extent required by applicable federal, state, local or foreign law, a
Participant or his or her successor shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise in connection with the Plan. The
Company shall not be required to issue any shares of Common Stock or make any cash payment under
the Plan until such obligations are satisfied.
15.2 Share Withholding. To the extent that applicable law subjects a Participant to tax
withholding obligations, the Committee may permit such Participant to satisfy all or part of such
obligations by having the Company withhold all or a portion of any shares of Common Stock that
otherwise would be issued to him or her or by surrendering all or a portion of any shares of Common
Stock that he or she previously acquired. Such shares of Common Stock shall be valued at their
Fair Market Value on the date when they are withheld or surrendered, and shall be deemed to have
been issued for purposes of identifying any shares which may become available for grant pursuant to
Section 3.3 above.
ARTICLE 16. FUTURE OF THE PLAN
16.1 Term of the Plan. The Plan, as set forth herein, became effective, subject to approval
by the Company’s shareholders, on February 26, 2004, the date the Board adopted the Plan and shall
remain in effect for a period of 10 years unless earlier terminated under Section 16.2.
16.2 Amendment or Termination. The Board may, at any time and for any reason, amend or
terminate the Plan. An amendment of the Plan shall be subject to the approval of the Company’s
shareholders only to the extent required by applicable laws, regulations or rules. No Awards shall
be granted under the Plan after the termination thereof. The termination of the Plan, or any
amendment thereof, shall not affect any Award previously granted under the Plan.
ARTICLE 17. DEFINITIONS
17.1 “Award” means any award of an Option, an SAR, an Unrestricted Share, a Restricted Share,
or a Performance Share Unit under the Plan, including dividend equivalent rights at the discretion
of the Committee.
17.2 “Board” means the Company’s Board of Directors, as constituted from time to time.
17.3 “Cause” means (a) the unauthorized use or disclosure of the confidential information or
trade secrets of the Company, which use or disclosure causes material harm to the Company, (b)
conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United
States or any State thereof, (c) gross negligence, (d) willful misconduct or (e) a failure
14
to
perform assigned duties that continues after the Participant has received written notice of such
failure. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions
that the Company (or the Subsidiary employing the Participant) may consider as grounds for the
discharge of the Participant without Cause.
17.4 “Change in Control” means:
(a) The consummation of a merger or consolidation of the Company with or into another entity
or any other corporate reorganization, if persons who were not shareholders of the Company
immediately prior to such merger, consolidation or other reorganization own immediately after such
merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity;
(b) The sale, transfer or other disposition of all or substantially all of the Company’s
assets;
(c) A change in the composition of the Board (other than due to the retirement of directors
upon reaching the Board’s mandatory retirement age), as a result of which fewer than 50% of the
incumbent directors are directors who either (i) had been directors of the Company on the date 24
months prior to the date of the event that may constitute a Change in Control (the “original
directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the aggregate of the original directors who were still in office at
the time of the election or nomination and the directors whose election or nomination was
previously so approved; or
(d) Any transaction as a result of which any person is the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing at least 25% of the total voting power represented by the Company’s then outstanding
voting securities. For purposes of this Paragraph (d), the term “person” shall have the same
meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a
Subsidiary and (ii) a corporation owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of the common stock of the Company.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state
of the Company’s incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities immediately before such
transaction.
17.5 “Code” means the Internal Revenue Code of 1986, as amended.
17.6 “Committee” means the Compensation Committee of the Company’s Board.
17.7 “Common Stock “ means shares of the common stock of the Company.
15
17.8 “Company” means Nordstrom, Inc., a Washington corporation.
17.9 “Employee” means a common-law employee of the Company or a Subsidiary.
17.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
17.11 “Exercise Price,” in the case of an Option, means the amount for which one share of
Common Stock may be purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the
applicable SAR Agreement, which is subtracted from the Fair Market Value of one share of Common
Stock in determining the amount payable upon exercise of such SAR.
17.12 “Fair Market Value” means the market price of a share of Common Stock, determined by the
Committee in good faith on such basis as it deems appropriate. Whenever possible, the
determination of Fair Market Value by the Committee shall be based on the closing price on the date
of the Award as reported by the New York Stock Exchange, or the primary exchange or quotation
system on which the Common Stock is then trading. Such determination shall be conclusive and
binding on all persons.
17.13 “ISO” means an incentive stock option described in Section 422(b) of the Code.
17.14 “NSO” means a stock option not described in Sections 422 or 423 of the Code.
17.15 “Non-Employee Director” means a member of the Company’s Board or the Board of Directors
of a Subsidiary who is not an Employee. Service as a Non-Employee Director shall be considered
employment for all purposes of the Plan, except as provided in Section 4.1.
17.16 “Option” means an NSO or an ISO granted under Article 5 of the Plan and entitling the
holder to purchase shares of Common Stock.
17.17 “Optionee” means an individual or estate who holds an Option.
17.18 “Participant” means an individual or estate who holds an Award.
17.19 “Performance Share Unit” means a bookkeeping entry representing the equivalent of one
share of Common Stock, as awarded under the Plan.
17.20 “Performance Share Unit Agreement” means the agreement between the Company and the
recipient of a Performance Share Unit that contains the terms, conditions and restrictions
pertaining to such Performance Share Unit.
17.21 “Plan” means this Nordstrom, Inc. 2004 Equity Incentive Plan, as amended from time to
time, including this 2007 Amendment and restatement, to maintain the Plan’s compliance with Code
Section 409A.
16
17.22 “Restricted Share” means a share of Common Stock awarded under the Plan, with such
restrictions as set forth in the applicable Restricted Share Agreement.
17.23 “Restricted Stock Unit” means a right granted under Article 10 to receive Common Stock
or cash at the end of a specified deferral period, which right may be conditioned on the
satisfaction of certain requirements (including the satisfaction of certain performance goals).
17.24 “Restricted Stock Unit Agreement” means the agreement between the Company and the
recipient of a Restricted Stock Unit that contains the terms, conditions and restrictions
pertaining to such Restricted Stock Unit.
17.25 “Restricted Share Agreement” means the agreement between the Company and the recipient
of a Restricted Share that contains the terms, conditions and restrictions pertaining to such
Restricted Share.
17.26 “SAR” means a stock appreciation right granted under Article 7 of the Plan.
17.27 “SAR Agreement” means the agreement between the Company and a Participant that contains
the terms, conditions and restrictions pertaining to his or her SAR.
17.28 “Service” means service as an Employee or Non-Employee Director.
17.29 “Stock Option Agreement” means the agreement between the Company and an Optionee that
contains the terms, conditions and restrictions pertaining to his or her Option.
17.30 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.
17.31 “Unrestricted Share” means a share of Common Stock awarded under Article 8 of the Plan.
17
This Plan is signed and adopted, pursuant to proper authority, this 19th day of November 2008.
| NORDSTROM, INC. | ||||||
| By: | /s/ Delena Sunday
|
|||||
| Title: | Executive Vice President | |||||
| Human Resources and Diversity Affairs | ||||||
18
Exhibit 10.2
AMENDMENT 2008-1
TO THE
NORDSTROM EXECUTIVE DEFERRED COMPENSATION PLAN
(2007 Restatement)
TO THE
NORDSTROM EXECUTIVE DEFERRED COMPENSATION PLAN
(2007 Restatement)
The Nordstrom Executive Deferred Compensation Plan (2007 Restatement) (“Plan”) is hereby amended to
reflect administrative changes adopted (1) to simplify administration of deferral elections after a
Plan participant receives a hardship distribution under the Nordstrom 401(k) Plan & Profit Sharing,
and (2) to establish a hierarchy of unforeseeable financial emergency withdrawals that complies
with Section 409A of the Internal Revenue Code.
| 1. | Section 3.7 Applicability of Deferral Agreement is replaced with the following: | |
| “3.7 Applicability of Deferral Agreement. |
(a) General Rule. Except as provided in this Section 3.7, a Deferral
Agreement shall be irrevocable and remains in effect for the entire Plan Year to
which it applies. A Participant must file a new Deferral Agreement to continue
deferrals in any subsequent Plan Year. The terms of any Deferral Agreement may, but
need not be, similar to the terms of any prior Deferral Agreement.
(b) Exceptions to Irrevocability.
(1) Financial Hardship. A Participant’s Deferral Agreement shall
be automatically canceled and deferrals shall cease for the remainder of the
Plan Year if the Participant:
(A) receives a distribution due to an unforeseeable financial
emergency, as described in Section 6.2(a)(1), or
(B) receives a hardship distribution from the Profit Sharing Plan
pursuant to Treasury Regulation 1.401(k)-1(d)(3).
(2) Disability. A Deferral Agreement shall be canceled if a
Participant becomes Disabled. For purposes of this section, “Disabled”
means that a Participant suffers from a medically determinable physical or
mental impairment resulting in his or her inability to perform the duties of
his or her position or any substantially similar position for a continuous
period of not less than six months.
(c) Resuming Participation. A Participant may elect to resume
deferrals under this Plan at any subsequent Annual Election Period, provided that
the Participant satisfies the Plan’s eligibility requirements in effect at that
time. In addition, effective January 1, 2009, if the reason for revocation of the
Deferral Agreement was receipt of a hardship distribution under the Profit Sharing
Plan, the Participant must wait until an Annual Election Period that begins at least
six
months after the Participant received the hardship distribution from the Profit
Sharing Plan before electing to resume deferrals under this Plan.”
2. Section 6.2 In-Service Distributions is amended by adding a new subsection 6.2(a)(4) as
follows:
“(4) Distribution Hierarchy. If a Participant qualifies for a distribution due to
unforeseeable financial emergency, the Participant must first exhaust amounts available from
his or her paid-time off bank under the Company’s Sabbatical Program before receiving a
distribution from this Plan.”
IN WITNESS WHEREOF, this Amendment 2008-1 to the Nordstrom Executive Deferred Compensation Plan
(2007 Restatement) is executed this 19th day of November 2008, effective January 1,
2009, except as otherwise provided herein.
| NORDSTROM, INC. | ||||||
| By: | Delena Sunday
|
|||||
| Title: | Executive Vice President | |||||
| Human Resources and Diversity Affairs | ||||||
2
Exhibit 10.3
AMENDMENT 2008-1
NORDSTROM, INC. LEADERSHIP SEPARATION PLAN
The Nordstrom, Inc. Leadership Separation Plan (“Plan”) is amended to exclude certain positions
from eligibility, to clarify how the Plan complies with certain provisions of the Employee
Retirement Income Security Act of 1974, as amended, and Section 409A of the Internal Revenue Code
of 1986, as amended, and to delegate amendment authority.
1. Article II Eligible Employees is amended by adding the following sentence to the end of Section
B:
“Employees holding the following positions are not Designated Leadership Employees for
purposes of this Plan: President—Nordstrom, Inc.; President—Merchandising; and
President—Stores.”
2. Article IV Plan Benefits is amended by adding a new Section G., as follows:
“G. Administration of Benefits.
1. Welfare Plan Under ERISA. The Plan is intended to be an employee welfare benefit
plan governed by ERISA. Therefore, in accordance with 29 CFR § 2510.3-2(b), the following
rules apply to benefits paid under the Plan:
a. Payments are not contingent, directly or indirectly, on a Participant’s
retirement;
b. The total amount of payments under this Plan cannot exceed the equivalent of
twice the Participant’s annual compensation during the year immediately preceding
the Participant’s termination of employment; and
c. All payments to the Participant under the Plan are completed within 24 months
after the Participant’s termination of employment.
2. Compliance with Code Section 409A. It is intended that benefits provided under
the Plan will qualify for exemptions contained in final regulations under Code Section 409A.
Therefore, severance benefits will be paid according to the following rules.
a. Cash Severance Benefits and Cash in Lieu of COBRA Contributions. Cash
Severance Benefits and cash in lieu of COBRA contributions will be paid in a single
lump sum on or before the last day of either of the following periods, whichever is
later:
(i) the 15th day of the third month following the end of the
calendar year in which the Participant’s Involuntary Termination occurs; or
leadership separation plan
amendment 2008-1
amendment 2008-1
(ii) the 15th day of the third month following the end of the
Company’s fiscal year in which the Participant’s Involuntary Termination occurs.
b. Outplacement Services and Relocation Benefits. Outplacement Services and
Relocation Benefits will not be provided for periods beyond the last day of the
second calendar year following the calendar year in which the Participant’s
Involuntary Termination occurred, provided that all reimbursements must be paid not
later than the third calendar year following the calendar year in which the
Participant’s Involuntary Termination occurred.”
3. Article VI Amendment and Termination is replaced with the following:
“The Company reserves the right to amend or terminate the Plan at any time; provided,
however, that no such amendment or termination will affect the right to any unpaid benefit
of any Eligible Leadership Employee who became entitled to such benefits prior to such
amendment or termination. The Board of Directors has the authority to amend or terminate
the Plan. The Compensation Committee has the authority to amend the Plan. The Company’s
senior officer with responsibility for Human Resources has the authority to approve
technical, administrative, editorial, and compliance amendments recommended by legal
counsel, including any amendments that are necessary to bring the Plan into legal compliance
or to clarify operation of the Plan.”
Approved pursuant to proper authority this 19th day of November 2008.
| NORDSTROM, INC. | ||||
| By: | Delena Sunday | |||
| Title: | Executive Vice President | |||
| Human Resources and Diversity Affairs | ||||
leadership separation plan
amendment 2008-1
amendment 2008-1
2
Exhibit 10.4
NORDSTROM
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(2008 Restatement)
Lane Powell PC
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200
TABLE OF CONTENTS
| Page | ||||
ARTICLE I. TITLE, PURPOSE AND EFFECTIVE DATE |
1 | |||
1.01 Title |
1 | |||
1.02 Purpose |
1 | |||
1.03 Effective Date |
1 | |||
ARTICLE II. ELIGIBILITYAND PARTICIPATION |
1 | |||
2.01 Eligibility |
1 | |||
2.02 Participation |
3 | |||
2.03 Disability |
4 | |||
2.04 Leave of Absence |
4 | |||
ARTICLE III. BENEFITS |
4 | |||
3.01 Retirement Benefit |
4 | |||
3.02 Tier I Executive Retirement Benefit |
5 | |||
3.03 Tier II Executive Retirement Benefit |
5 | |||
3.04 1999 and Transition Plan Executive Retirement Benefit |
5 | |||
3.05 Normal Retirement Benefits |
6 | |||
3.06 Early Retirement Benefits |
6 | |||
3.07 Deferred Retirement Benefits |
7 | |||
3.08 Disability Retirement Benefits |
7 | |||
3.09 Death Benefit |
7 | |||
3.10 Payment of Benefits |
7 | |||
ARTICLE IV. RIGHTS OF PARTICIPANTS IN THE PLAN |
8 | |||
4.01 Vesting |
8 | |||
4.02 Exceptions to Vesting |
9 | |||
4.03 Application of Clawback Policy |
10 | |||
4.04 Rights in Plan are Unfunded and Unsecured |
11 | |||
4.05 Discretion to Grant Years of Service or Increase Age |
11 | |||
ARTICLE V. DEATH BENEFITS |
11 | |||
5.01 Death Benefit Payable |
11 | |||
5.02 50% Joint and Survivor Annuity |
12 | |||
5.03 Acknowledgment |
12 | |||
5.04 Surviving Beneficiary |
12 | |||
5.05 Doubt as to Beneficiary |
12 | |||
ARTICLE VI. TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN |
13 | |||
6.01 Plan Amendments and Termination |
13 | |||
supplemental executive retirement plan
2008 restatement
2008 restatement
i
| Page | ||||
6.02 Change In Control — Protected Benefits |
13 | |||
ARTICLE VII. CLAIMS PROCEDURES |
14 | |||
7.01 Submission of Claim |
14 | |||
7.02 Denial of Claim |
14 | |||
7.03 Review of Denied Claim |
14 | |||
7.04 Decision upon Review of Denied Claim |
14 | |||
ARTICLE VIII. TRUST |
14 | |||
8.01 Establishment of the Trust |
14 | |||
8.02 Interrelationship of the Plan and the Trust |
15 | |||
8.03 Funding on Change in Control |
15 | |||
8.04 Administration of Trust Assets |
15 | |||
ARTICLE IX. PLAN ADMINISTRATION |
15 | |||
9.01 Plan Sponsor and Administrator |
15 | |||
9.02 Authority of Committee |
15 | |||
9.03 Exercise of Authority |
16 | |||
9.04 Delegation of Authority |
16 | |||
9.05 Reliance on Opinions |
16 | |||
9.06 Information |
16 | |||
9.07 Indemnification |
16 | |||
ARTICLE X. MISCELLANEOUS |
17 | |||
10.01 No Employment Contract |
17 | |||
10.02 Employee Cooperation |
17 | |||
10.03 Illegality and Invalidity |
17 | |||
10.04 Required Notice |
17 | |||
10.05 Interest of Participant’s Beneficiary |
17 | |||
10.06 Tax Liabilities from Plan |
17 | |||
10.07 Benefits Nonexclusive |
18 | |||
10.08 Discharge of Company Obligation |
18 | |||
10.09 Costs of Enforcement |
18 | |||
10.10 Gender and Case |
18 | |||
10.11 Titles and Headings |
18 | |||
10.12 Applicable Law |
18 | |||
10.13 Counterparts |
18 | |||
10.14 Definitions |
18 | |||
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ARTICLE I.
TITLE, PURPOSE AND EFFECTIVE DATE
1.01 Title. This plan shall be known as the Nordstrom Supplemental Executive
Retirement Plan, and any reference in this instrument to the “Plan” or “SERP” shall include the
plan as described herein and as amended from time to time.
1.02 Purpose. The Plan is intended to constitute an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group of management or
highly compensated employees of Nordstrom, Inc., a Washington corporation (“Company”), and its
affiliates as designated by the Board (collectively the “Employers”), within the meaning of
Section 201(2), 301(a)(3) and 401(a)(4) of the Employee Retirement Income Security Act of 1974
(“ERISA”). In addition, the Plan is an unfunded, nonqualified plan that is not intended to satisfy
the qualification requirements set forth in Section 401(a) of the Internal Revenue Code of 1986, as
amended (“Code”). The benefits provided to a Participant under this Plan are in addition to any
other benefits available to such Participant under any other plan or program for employees of the
Employers. The Plan shall supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.
1.03 Effective Date. The Plan was originally effective as of July 18, 1988. The Plan
was subsequently amended on a number of occasions and, in order to provide a number of Plan design
changes, to make changes in Plan administration and to otherwise clarify certain Plan provisions,
the Company adopted a restatement of the Plan, effective January 1, 1999. Subsequent to the 1999
Restatement, the Company undertook a complete review of the competitive nature of the Plan’s
benefit structure, revisited the initial goals and objectives of the Plan and, in making a number
of other administrative changes, adopted the 2002 Restatement. After an internal review of the
2002 Restatement and the structure of the benefit formula and its impact on specific participant
groups, a number of modifications were proposed, which were included in a 2003 Restatement. The
2008 Restatement is adopted effective January 1, 2009 to document compliance with Section 409A of
the Code. For the period from January 1, 2005 to December 31, 2008, the Plan observed operational
compliance with Section 409A of the Code, in accordance with transitional guidance issued by the
Internal Revenue Service.
ARTICLE II.
ELIGIBILITYAND PARTICIPATION
2.01 Eligibility. Eligibility for this Plan shall be limited to Executives as that
term is defined herein.
(a) Executive Defined. For purposes of this Plan, the term “Executive” means the
officers of Nordstrom, Inc., as selected by the Board, and any other management or highly
compensated employee of the Company or an Employer, who has been specifically designated
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by the
Committee and approved by the Board as eligible to become a Participant in this Plan. When
designating such individual as an “Executive,” the Board or Committee shall have the discretion to
categorize Executives as any one of the following:
(i) 1999 Plan Executives. A “1999 Plan Executive” is any Executive who, as of January
1, 2003, was both: (1) designated as eligible under the Plan (either because he or she was a
corporate officer or as a result of Board or Committee designation), and (2) eligible for, or
within one year of being eligible for, Early Retirement under the Plan.
(ii) Transition Plan Executives. A “Transition Plan Executive” is any Executive who,
as of January 1, 2003, met all of the following requirements: (1) was designated as eligible under
the Plan (either because he or she was a corporate officer or as a result of Board or Committee
designation), (2) had more than 15 Years of Credited Service under the Plan, (3) was not eligible
for, and was not within one year of being eligible for, Early Retirement under the Plan, and (4)
was not specifically designated as a Tier I or Tier II Executive.
(iii) Tier I Executives. A “Tier I Executive” is any Executive designated by the
Board or the Committee as a Tier I Executive and who is not a 1999 Plan Executive or a Transition
Plan Executive.
(iv) Tier II Executives. A “Tier II Executive” is any Executive designated by the
Board or Committee as a Tier II Executive and who is not a 1999 Plan Executive or a Transition Plan
Executive.
(v) Change in Designation. The Committee and the Board shall have the discretion and
authority to change an Executive’s designation, provided that the time and form of payment of a
benefit under this Plan shall be determined based on the Executive’s category when he or she was
first designated as eligible for this Plan.
(b) Revocation of Designation. Notwithstanding the foregoing, the Board may, in its
sole and exclusive discretion, revoke an employee’s designation as an Executive hereunder at any
time. An Executive whose designation has been revoked shall be entitled to only those benefits, if
any, which have vested as of the date of revocation, and the revocation shall not change the time
or form of payment of benefits.
(c) Certain Executive Transfers. An Executive pursuant to subparagraph (a) who has
terminated employment with an Employer or the Company as a result of an employment transfer to an
affiliate that is not an Employer, shall continue to be considered an eligible Executive solely for
purposes of determining whether the Executive has separated from active employment (including for
purposes of determining eligibility for Early Retirement under 3.06), but shall not accrue any
additional benefits while not actively employed by the Company or an Employer. Any subsequent
designation of such individual’s Executive status under the Plan may
include benefit credit for years of service with such organization as the Committee deems
appropriate.
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2.02 Participation. An Executive becomes a “Participant” in the Plan, when such
Executive retires under 2.02(a), with the appropriate approval under 2.02(b) and 2.02(c), as
follows:
(a) “Retirement” Defined. An Executive retires under the terms of the Plan when such
Executive separates from active employment with the Company and each and every subsidiary and
affiliate of the Company, on or after a retirement date specified in this section. For purposes of
this Plan, an Executive separates from active employment on the date when the Company and the
Executive reasonably anticipate that the Executive’s level of bona fide services will be
permanently reduced to 49 percent or less of the level of bona fide services performed during the
immediately preceding period of 36 consecutive months. An Executive’s termination of employment
with the Company as a result of such Executive’s transfer to a subsidiary or affiliate of the
Company shall not, by itself, constitute a separation from active employment for purposes of this
section. The retirement dates are:
(i) Normal Retirement Date. The Executive’s Normal Retirement Date shall be (a) a
1999 Plan Executive’s sixtieth (60th) birthday, (b) a Transition Plan Executive’s fifty-fifth
(55th) birthday, or (c) a Tier I or Tier II Executive’s fifty-eighth (58th) birthday.
(ii) Early Retirement Date. The Executive’s Early Retirement Date shall be the date
that the Executive has both:
(1) completed at least ten (10) Years of Credited Service (as defined under 3.01(a)); and
(2) in the case of a 1999 Plan Executive, attained age 50, or in the case of a Tier I, Tier
II or Transition Plan Executive, attained age 53.
(iii) Disability Retirement Date. The Executive’s Disability Retirement Date shall be
the date on which: (1) a 1999 Plan Executive becomes eligible for unreduced Early Retirement
Benefits under Section 3.06, provided that the Executive continues to be permanently Disabled on
such date, or (2) a Tier I, Tier II or Transition Plan Executive becomes eligible for Normal
Retirement Benefits under 3.05, provided that the Executive continues to be permanently Disabled
through his or her Normal Retirement Date.
(b) Committee Approval. As a condition to payment, the Committee must approve all
Retirement Benefits under Article III.
(c) Board Approval for Early Retirement. An Executive who separates from active
employment on or after his or her Early Retirement Date (but prior to Normal Retirement Date) must
receive the consent and approval of the Board for such early retirement. If the
Executive elects to separate from active employment without Board approval of early retirement, the
Executive’s entire benefit under the Plan shall be forfeited.
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2.03 Disability. An Executive who becomes Disabled while employed by the Company or
an Employer shall be deemed to be an Executive in active service with the Company during the period
of such Disability and shall continue to accrue Years of Credited Service for such period whether
or not such Executive actually performs services for the Company during such period; provided,
however, that accrual of service under this section shall cease upon the earlier of the Disabled
Executive’s: (i) recovering from such Disability; or (ii) Disability Retirement Date. An Executive
who recovers from such Disability, but who does not thereafter return to active service with an
Employer shall be treated as though he or she terminated employment prior to reaching a Retirement
Date and his or her Plan benefit shall be forfeited. For purposes of this Plan, an Executive is
Disabled if, due to a medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of at least 12 months, the
Executive is receiving income replacement benefits for a period of at least three months under the
Company’s Disability Program.
2.04 Leave of Absence. The Board shall determine, on an individual basis and in its
sole and absolute discretion, the treatment under the Plan of an Executive who takes a leave of
absence from the Company or an Employer for reasons other than Disability, provided that the Board
shall not change the time or form of payment of benefits set forth in this Plan solely because of
the Executive’s leave of absence. An Executive on a leave of absence for reasons other than
Disability will be considered to have experienced a termination of employment for purposes of this
Plan if the period of leave exceeds six months, unless the Executive retains a right to be
reinstated to employment with the Company or an Employer under an applicable law or contract after
the six-month period ends.
ARTICLE III.
BENEFITS
3.01 Retirement Benefit. An Executive’s “Retirement Benefit” shall mean the benefit
payable to the Executive as a Participant, pursuant to this Article III, expressed and payable as a
monthly benefit in the form of a 50% Joint and Survivor Annuity, commencing on the Retirement Date.
An Executive’s Retirement Benefit depends on the Executive’s eligibility category as designated by
the Board or Committee as a 1999 Plan Executive, Transition Plan Executive, Tier I Executive, or
Tier II Executive, with the following provisions and definitions applying to each of those
categories:
(a) Year of Credited Service. A “Year of Credited Service” shall have the same
meaning as “Years of Service” under the Nordstrom 401(k) Plan & Profit Sharing (and any predecessor
or successor thereto) (“Profit Sharing Plan”). Service with a subsidiary or other corporation
controlled by the Company shall not be considered “Credited Service” unless the Committee
specifically agrees to credit such service. In addition, Years of Credited Service may
be granted by the Committee under 4.05. In no case, however, will more than twenty five (25) Years
of Credited Service be counted for any purpose under the Plan.
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(b) Final Average Compensation. For purposes of this Plan, Final Average Compensation
shall mean the monthly compensation resulting from the average of the highest thirty-six (36)
months of the Executive’s Covered Compensation, measured over the Averaging Period:
(i) Covered Compensation. For purposes of determining an Executive’s Final Average
Compensation, Covered Compensation shall include base salary and the cash bonus accrued for a
fiscal year, divided by the number of full and partial months the Executive worked in the fiscal
year. Covered Compensation shall not include any other items of remuneration such as
reimbursements, allowances, fringe benefits or gains on the exercise of stock options, regardless
of whether such amounts are included in the taxable income of the Executive. Unless specifically
agreed to by the Committee, Covered Compensation shall not include any remuneration provided by a
subsidiary or an affiliate.
(ii) Averaging Period. The Executive’s Averaging Period shall be the longer of: (a)
the final sixty (60) months of the Executive’s employment; or (b) the entire period of service
(measured in months) after either (1) a 1999 Plan Executive’s fiftieth (50th) birthday, or (2) a
Transition Plan or Tier I or II Executive’s fifty-third (53rd) birthday. Unless the Committee
decides otherwise, periods of employment with a subsidiary or affiliate that is not an Employer
shall not be considered for purposes of determining the Averaging Period.
3.02 Tier I Executive Retirement Benefit. A Tier I Executive’s Retirement Benefit
shall be equal to one and six-tenths percent (1.6%) of such Executive’s Final Average Compensation,
multiplied by the Executive’s Years of Credited Service.
3.03 Tier II Executive Retirement Benefit. A Tier II Executive’s Retirement Benefit
shall be equal to eight-tenths percent (0.8%) of such Executive’s Final Average Compensation,
multiplied by the Executive’s Years of Credited Service.
3.04 1999 and Transition Plan Executive Retirement Benefit. A 1999 Plan Executive’s
Retirement Benefit and a Transition Plan Executive’s Retirement Benefit shall be equal to two and
four-tenths percent (2.4%) of such Executive’s Final Average Compensation, multiplied by the
Executive’s Years of Credited Service, but reduced by the Executive’s Annuity Value of Profit
Sharing, determined as follows:
(a) Annuity Value of Profit Sharing. The Executive’s Annuity Value of Profit Sharing
means the actuarially equivalent monthly amount of the Executive’s Company contribution account
balances as of the date such Executive retires, if the account balances were paid in the form of a
50% Joint and Survivor Annuity, as follows:
(i) Profit Sharing Plan. Company-provided profit sharing and matching contributions
(and income thereon) under the Profit Sharing Plan; plus
(ii) Other Qualified Plans. The amount of any Company-provided benefits to the
Executive under any other qualified plan of the Company or its affiliates; plus
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(iii) Distributions. The amount of any previous withdrawals or other distributions of
any type (regardless of the payee) from the previously described plans (without adjustment for
imputed earnings for any period following the actual date of withdrawal or distribution), other
than (1) distributions of life insurance policies from the Profit Sharing Plan; and (2) the excess
(if any) of premiums paid with respect to life insurance policies prior to such date over the cash
surrender value used in computing the account balances in the Profit Sharing Plan as of such date
expressed and payable as a monthly benefit commencing on the applicable payment date in the form of
a 50% Joint and Survivor Annuity.
(b) 50% Joint and Survivor Annuity. For purposes of determining the reductions under
Section 3.04(a), a 50% Joint and Survivor Annuity means the annuity defined in Section 5.02, with
the following modifications to take into account the determination of such annuity value upon the
Participant’s (as opposed to the Beneficiary’s) commencement of benefits under the Plan:
(i) Beneficiary. A Participant’s joint annuitant in this context is the individual
who would be considered the Participant’s Beneficiary under 5.01(a) (for purposes of the Plan’s
pre-retirement survivor annuity) on the date the Participant retires. In the event that there is
no Beneficiary on such date, the survivor annuity shall be calculated as though the Participant had
a Beneficiary of the same age as the Participant.
(ii) Actuarial Equivalent. The Actuarial Equivalent used for this section shall be
the same as that defined and used by the Committee in Section 5.02(b), except that the interest
rate used shall be the IRS Long Term Applicable Federal Rate (AFR) stated for the month prior to
the month in which the Executive retires.
3.05 Normal Retirement Benefits. An Executive who retires on or after Normal
Retirement Date shall be entitled, upon approval of the Committee, to a Retirement Benefit under
either 3.02, 3.03 or 3.04 (as appropriate) determined as of the actual date the Executive retires.
3.06 Early Retirement Benefits. Subject to 3.06(c), an Executive who retires (with
the consent and approval of the Board) on or after his or her Early Retirement Date shall be
entitled, upon approval of the Committee, to an Early Retirement Benefit as follows:
(a) Retirement Benefit. The Executive’s Retirement Benefit under 3.02, 3.03 or 3.04
(as appropriate) determined on the actual date the Executive retires, reduced by the Early
Retirement Reduction Factor.
(b) Early Retirement Reduction Factor.
(i) 1999 Plan Executives. For 1999 Plan Executives, three percent (3%) for each year
the sum of the Participant’s age and Years of Credited Service is less than 75.
(ii) Transition Plan Executives. For Transition Plan Executives, twelve and one-half
percent (12.5%) for each year prior to the Executive’s Normal Retirement
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Date, with such reduction
percentage to be prorated for any applicable fraction of a year, based on the number of full months
worked in such year.
(iii) Tiers I and II Executives. For any Tier I or Tier II Executive, ten percent
(10%) for each year prior to the Executive’s Normal Retirement Date, with such reduction percentage
to be prorated for any applicable fraction of a year, based on the number of full months worked in
such year.
(c) Transition Plan Executives. If a Transition Plan Executive’s Early Retirement
Benefit calculated as though they were a Tier I Executive (under 3.02 and 3.06(b)(iii)), is greater
than the Early Retirement Benefit calculated as a Transition Plan Executive (under 3.04 and
3.06(b)(ii)), then such Transition Plan Executive shall be entitled to receive such greater Early
Retirement Benefit calculated as though they were a Tier I Executive.
3.07 Deferred Retirement Benefits. An Executive who retires after his or her Normal
Retirement Date shall be entitled to a Deferred Retirement Benefit equal to the Normal Retirement
Benefit under this Article III, but increased with interest for each Year of Post-Normal Retirement
Date Service, up to a maximum of ten (10) Years of Post-Normal Retirement Date Service. A Year of
Post-Normal Retirement Date Service means the period of twelve (12) consecutive complete calendar
months beginning with the first of the month following a Participant’s Normal Retirement Date, and
each successive period of twelve (12) consecutive complete calendar months, prior to the
Participant’s date of Retirement (as defined in 2.02(a)). Partial Years of Post-Normal Retirement
Date Service shall be disregarded. An interest rate of five percent (5%) per Year of Post-Normal
Retirement Date Service, compounded annually, shall be used to calculate the increase under this
section.
3.08 Disability Retirement Benefits. A Disabled Executive continuing to accrue
service credit under Section 2.03 shall be treated, for purposes of the Plan, as an active
Executive for such period, and the Retirement Benefit under this Article III shall be determined as
of such Disabled Executive’s Disability Retirement Date. A Disabled Executive may not receive
Retirement Benefits prior to the Disability Retirement Date, even if, for example, the Executive
qualifies for Early Retirement before his or her Disability Retirement Date. In addition, a
Disabled Executive who receives Retirement Benefits while also receiving long-term disability or
other disability income benefits pursuant to any other Employer-sponsored plan, fund or program
that covers a substantial number of employees (excluding disability income paid by Social
Security), shall have the monthly Retirement Benefit payable under this Plan reduced (but not below
zero) by the monthly benefit actually paid or payable under such other plan. The amount by which
the disability retirement benefit is reduced due to other payments shall be permanently forfeited.
3.09 Death Benefit. The Death Benefit under this Plan, whether payable before or
after Retirement, shall consist solely of a survivor annuity, payable for the life of the
Beneficiary (if any), as described in Article V.
3.10 Payment of Benefits. The following shall apply to the payment of benefits under
Article III:
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(a) Payment Commencement.
(i) General Rule. Payment of benefits under this Article III shall commence within 90
days after the date the Executive retires. The Participant may not designate the taxable year in
which payments will begin.
(ii) Key Employees. If the Executive is a Key Employee, in order to comply with Code
Section 409A, payments during the six-month period beginning on the Retirement Date shall be
suspended. The first payment after expiration of the six-month waiting period shall include all
periodic payments that were suspended during the six-month waiting period. For purposes of the
Plan, Key Employee has the same meaning as under Code Section 416(i)(1)(A)(i), (ii), or (iii) (and
disregarding Code Section 416(i)(5)). An Executive’s status as a Key Employee is determined as of
each September 30, and the Executive is treated as a Key Employee under the Plan for the next
calendar year.
(b) Semi-Monthly Payment. Periodic payments of benefits shall be paid in equal
monthly amounts on a semi-monthly basis through the Company’s normal payroll system.
(c) Withholding.
(i) Income Tax and Other Withholding. The Company shall withhold from any and all
benefit payments made under the Plan and this Article III, all federal, state and local income
taxes the Company reasonably determines are required to be withheld in connection with the benefits
hereunder, and any other amounts due, owing and unpaid by the Participant to the Company, to be
determined in the sole discretion of the Company. In the event the amounts due under this
3.10(c)(i) exceed the amount of benefits currently payable, the Participant shall be required to
contribute to the Company an amount necessary to meet such obligations.
(ii) Employment Taxes. At the time of Retirement, the Company shall calculate the
employment taxes (i.e., Social Security and Medicare taxes) due on the Participant’s benefit under
the Plan. The Company shall pay the Company’s share and the Participant’s share of the employment
taxes directly to the appropriate taxing authority. To the extent that the Company’s payment
creates an additional tax liability for the Participant, the Company shall pay the Participant an
additional amount to satisfy this additional tax liability. The Company’s payment to the
Participant must be made no later than the last day of the Participant’s taxable year next
following the Participant’s taxable year in which the Company makes the employment tax payment on
behalf of the Participant.
ARTICLE IV.
RIGHTS OF PARTICIPANTS IN THE PLAN
4.01 Vesting. Except as otherwise provided in this Section and elsewhere in
Article IV and Section 6.02, no Executive, Participant or Beneficiary shall have any vested
interest in any
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Plan benefits. The Benefits in which such Participant or Beneficiary has a vested
interest under this Section (subject to forfeiture in 4.02) shall be determined as follows:
(a) Years in Position. In addition to the other requirements of this Section 4.01, an
Employee must have been a designated Tier II Executive under the Plan for a period of at least
seven Years of Credited Service in order to become vested in a benefit under this Plan.
(b) Early Retirement. A Participant entitled to Early Retirement Benefits under
Section 3.06 shall have a vested interest in such benefits after the Board consents to and approves
the Participant’s Early Retirement Date.
(c) Normal Retirement. A Participant entitled to Normal Retirement benefits under
Section 3.05 shall have a vested interest in Normal Retirement benefits on the Participant’s Normal
Retirement Date.
(d) Deferred Retirement. An Executive who retires after Normal Retirement Date shall
have a vested interest in Retirement Benefits granted under Section 3.05 on the Participant’s
Normal Retirement Date, and shall have a vested interest in the additional benefits under Section
3.07 on such Participant’s Deferred Retirement Date.
(e) Death Benefit. The Beneficiary of a Participant who is entitled to a survivor
annuity under Article V shall have a vested interest in any applicable survivor annuity which is
actually payable in accordance with the terms of Article V, on and after the date of the
Participant’s death.
4.02 Exceptions to Vesting. Notwithstanding any other provision of this Plan, an
Executive’s benefit shall be forfeited in the following situations:
(a) Tier II Executives. No benefits shall be paid to a Tier II Executive who
terminates employment with less than seven Years of Credited Service as a designated Tier II
Executive under the Plan.
(b) Suicide or Self-Inflicted Injury. No benefits shall be paid to an Executive or to
any Beneficiary of such Executive as a result of suicide or self-inflicted injury by the Executive
within three (3) years after such Executive becomes an “Executive” under the Plan.
(c) Termination for Good Cause. If an Executive is terminated for “cause” or if an
Executive is found by the Company at any time to have engaged in any acts as would have constituted
“cause” for termination, the Executive and any Beneficiary of the Executive shall immediately
forfeit any and all rights to benefits under this Plan. Accordingly, any benefits in pay status
shall cease immediately, and no future benefits shall be payable to the Executive or to his or her
Beneficiary. For purposes of this Plan, “cause” shall mean that the Executive has or had:
(i) misappropriated, stolen or embezzled funds of the Company or an affiliate;
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(ii) committed an act of deceit, fraud, dereliction of duty or gross or willful misconduct;
(iii) been convicted of either a felony or a crime involving moral turpitude or entered a plea
of no contest in response to an indictment for such crime or felony;
(iv) intentionally disclosed confidential information of the Company or an affiliate (except
when such disclosure is made pursuant to the direction of the Company or in accordance with legal,
administrative or judicial process); or
(v) engaged in competitive behavior against, actions inimical to the interests of, purposely
aided a competitor of, or has misappropriated or aided in the misappropriation of a material
opportunity of the Company or its affiliates.
(d) Cessation of Benefits for Competition. Retirement Benefits currently in pay
status to a Participant shall cease, and no further benefits shall be payable, to the Participant
(or Beneficiary) to the extent the Participant competes, directly or indirectly, with the Company.
For purposes of this Plan, “competing, directly or indirectly, with the Company” shall mean
(without limitation) a determination, in the sole discretion of the Committee, of any of the
following: (i) engaging in the operation of any type of business or enterprise in any way
competitive with the business of the Company or its subsidiaries or affiliates, (ii) holding an
interest, either directly or indirectly, as owner, director, officer, employee, partner,
shareholder (other than as the owner of less than two percent (2%) of the outstanding stock of a
publicly owned company), in any type of business or enterprise in any way competitive with the
business of the Company or its subsidiaries or affiliates; or (iii) investing capital in, lending
money or property to or rendering services to any type of business or enterprise in any way
competitive with the business of the Company or its subsidiaries or affiliates. In the event of a
dispute as to the application of this paragraph, the Committee may waive or modify its right to
discontinue payment to any Participant or to any Beneficiary of such Participant by written
agreement.
4.03 Application of Clawback Policy. This section applies if the Board elects to
apply the Company’s clawback policy to a Participant and application of the clawback policy results
in a reduction in the Participant’s Final Average Compensation. The Participant’s Plan benefit
shall be recalculated, and the
Participant’s future payments shall be adjusted automatically beginning with the first payment
after the recalculation is completed. To the extent that the Participant has already received
payments under the Plan and those payments are greater than the recalculated benefit (i.e., an
overpayment), the Plan Administrator shall recover the overpayment by reducing the next payment due
under the Plan (but not below zero) and applying it to the overpayment. To the extent that there
continues to be an overpayment after reduction of the first recalculated payment, each successive
payment shall be reduced (but not below zero) and the reduction shall be applied to the overpayment
until the overpayment has been repaid in full. Once the overpayment has been repaid in full, the
Participant shall receive the recalculated benefit as if the recalculated benefit had been the
initial benefit calculated under the Plan. The provisions of this section for recovery of
overpayments shall also apply to the Beneficiary of a Participant after the Participant’s death.
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4.04 Rights in Plan are Unfunded and Unsecured. The Company’s obligation under the
Plan shall in every case be an unfunded and unsecured promise to pay. A Participant’s right to
Plan distributions shall be no greater than the rights of general, unsecured creditors of the
Company. The Company may establish one or more grantor trusts (as defined in Code Section 671
et seq.) to facilitate the payment of benefits hereunder; however, the Company shall not be
obligated under any circumstances (other than a Change of Control, as described in 6.02) to fund
its financial obligations under the Plan. Any assets which the Company may acquire or set aside to
defray its financial liabilities shall be general assets of the Company, and such assets, as well
as any assets set aside in a grantor trust, shall be subject to the claims of its general creditors
in the event of the Company’s insolvency.
4.05 Discretion to Grant Years of Service or Increase Age. If circumstances warrant
(in order to attract or retain a qualified Executive), and it is decided it is in the best
interests of the Company, the Committee shall have the authority and discretion to grant to certain
individuals additional Years of Credited Service or to treat such individuals as having attained a
certain age for purposes of this Plan, provided, however, that no such action may alter the time or
form of payment of Plan benefits. Such circumstances may include (a) providing Executives with a
recruiting incentive, or (b) such other circumstances that the Committee deems appropriate. The
Committee may condition the receipt of such additional benefits (to which the Executive is not
otherwise entitled) on the Participant’s execution of an election of increased benefits under this
Plan and a general release of all claims. The Committee’s granting of Years of Credited Service
and/or treating the Executive as attaining a certain age may affect the amount of the Executive’s
benefit under this Plan, but shall not alter, and shall not be construed as altering, the
Executive’s actual age or years of service with the Employer under any other plan of the Employer
or for purposes of determining the time or form of payment under this Plan.
ARTICLE V.
DEATH BENEFITS
5.01 Death Benefit Payable. Each Executive’s Retirement Benefit is expressed and
payable as a monthly benefit in the form of a 50% Joint and Survivor Annuity under this Plan.
Accordingly, the sole death benefit payable under this Plan on behalf of an Executive or a
Participant is as follows:
(a) Pre-Retirement Death Benefit. If a Participant dies while actively employed as an
Executive, a pre-retirement death benefit shall be payable under the Plan upon the death of the
Executive. The pre-retirement death benefit shall be a Survivor Annuity payable for the life of
the Executive’s Beneficiary, calculated as though the Executive had retired as a Participant and
had begun receiving Early, Normal or Deferred Retirement Benefits under the Plan based on his or
her actual age and Years of Credited Service on the day before his or her death. The periodic
payment to the Beneficiary is 50% of the periodic payment that would have been paid to the
Executive if the Executive had not died prior to Retirement. If the Executive
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dies before reaching
a Retirement Date under the Plan, the survivor annuity shall commence on the earliest date the
Executive would have been eligible to retire under the Plan.
(b) Post-Retirement Death Benefit. The Post-Retirement Death Benefit payable on
behalf of a Participant shall be a 50% Survivor Annuity payable for the life of the Participant’s
Beneficiary, based on the actual Retirement Benefit the Participant was receiving at the time of
his or her death, calculated in accordance with the provisions of Section 5.02.
5.02 50% Joint and Survivor Annuity. A 50% Joint and Survivor Annuity means an
annuity for the life of the Participant and, after his or her death, a survivor annuity for the
life of the Participant’s Beneficiary in an amount that is fifty percent (50%) of the original
annuity amount paid to the Participant; provided, however, that if the Beneficiary is more than
five years younger than the Participant, such survivor annuity will be calculated so that it is the
Actuarial Equivalent of the 50% survivor annuity for a Beneficiary five years younger than the
Participant.
(a) Beneficiary. A Participant’s Beneficiary is the individual to whom the
Participant is legally married or the Participant’s Life Partner on the date of the Participant’s
death. For this purpose, the term “Life Partner” has the same meaning as is used under the
Nordstrom Welfare Benefit Plan; provided, however, that the Committee may, in its discretion,
substitute a less restrictive definition than is used in the Nordstrom Welfare Benefit Plan.
(b) Actuarial Equivalent. The Committee shall have the authority to periodically
determine and change the appropriate factors used to determine Actuarial Equivalence under the
Plan. As of the Effective Date of this Restatement, the mortality table shall be the 1983 Group
Annuity Mortality Table for males (GAM 83) and the interest rate shall be the IRS Long Term
Applicable Federal Rate (AFR) stated for the month of the Executive’s death.
5.03 Acknowledgment. The Committee shall have the sole and exclusive discretion to
determine the identity of any Beneficiary, and no person shall have a right to any death benefit
under this Plan in the absence of a determination that he or she is the Beneficiary of the
Executive or Participant.
5.04 Surviving Beneficiary. For purposes of determining whether the Beneficiary
predeceases the Executive, the individual is considered to survive the Executive if such
Beneficiary is alive seven (7) days after the date of the Executive’s death.
5.05 Doubt as to Beneficiary. If the Plan Administrator has any doubt as to the proper
individual to receive payments pursuant to this Plan, the Plan Administrator shall have the right,
exercisable in its discretion, to cause the Executive’s Employer to withhold such payments until
this matter is resolved to the Plan Administrator’s satisfaction.
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ARTICLE VI.
TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN
6.01 Plan Amendments and Termination.
(a) Board of Directors. The Plan may be amended or terminated by the Board of
Directors at any time. Except as provided in 6.02, such amendment or termination may modify or
eliminate any benefit hereunder other than a benefit that is in pay status, or the vested portion
of a Retirement Benefit that is not in pay status.
(b) Compensation Committee. The Committee has the authority on behalf of the Board to
review, finalize, approve and adopt amendments to the Plan, other than amendments relating to Plan
eligibility. Except as provided in 6.02, such amendment may modify or eliminate any benefit
hereunder other than a benefit that is in pay status, or the vested portion of a Retirement Benefit
that is not in pay status. The Committee shall notify the Board of all amendments adopted under
this provision.
(c) Officer in Charge of Human Resources. The Company’s senior officer with
responsibility for Human Resources has the authority on behalf of the Board to review, finalize,
approve and adopt technical, legal, administrative, and compliance amendments recommended by the
Company’s legal counsel. The Company’s senior officer with responsibility for Human Resources
shall notify the Board of all amendments adopted under this provision.
(d) Benefits on Termination. If the Plan is terminated, benefit payments may be
accelerated only to the extent permitted in final regulations under Code Section 409A.
6.02 Change of Control – Protected Benefits. In the event of a Change of Control (as
defined in the Trust), the following additional provisions shall apply.
(a) No Amendment or Termination. No amendment (or termination) of the Plan can occur
that would reduce or otherwise eliminate the monthly benefit payable under the Plan to any person
with respect to a Participant who retired prior to such Change of Control, nor shall any Plan
amendment reduce the benefit to be paid with respect to an Executive (who has not retired) below
the amount which such Executive has accrued and would have received (upon reaching Normal
Retirement Date) had he or she retired the day before such Change of Control (the “Change of
Control Benefit”).
(b) Full Vesting in Accrued Benefit. Upon the occurrence of a Change of Control, each
active Executive shall be fully vested in his or her Change of Control Benefit under this Plan
through the date of the Change of Control; in the event of termination of employment after a Change
of Control and before the Executive’s Normal Retirement Date, the
terminated Executive shall receive a reduced Early Retirement benefit commencing on his or her
Early Retirement Date (with reductions based upon the age attained on the actual Early Retirement
Date and without the need for Board approval of the Early Retirement Date).
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(c) Full Funding. Notwithstanding the provisions of Section 4.04 and the unfunded
status of the Plan, in the event of a Change of Control, the Company shall fully fund the Trust as
provided in Article VIII.
ARTICLE VII.
CLAIMS PROCEDURES
7.01 Submission of Claim. Benefits shall be paid in accordance with the provisions of
this Plan. The Participant, or any person claiming through the Participant (“Claiming Party”),
shall make a written request for benefits under this Plan, mailed or delivered to the Committee.
Such claim shall be reviewed by the Committee or its delegate.
7.02 Denial of Claim. If a claim for payment of benefits is denied in full or in
part, the Committee or its delegate shall provide a written notice to the Claiming Party within
ninety (90) days setting forth: (a) the specific reasons for denial; (b) any additional material
or information necessary to perfect the claim; (c) an explanation of why such material or
information is necessary; and (d) an explanation of the steps to be taken for a review of the
denial. A claim shall be deemed denied if the Committee or its delegate does not take any action
within the aforesaid ninety (90) day period.
7.03 Review of Denied Claim. If the Claiming Party desires Committee review of a
denied claim, the Claiming Party shall notify the Committee or its delegate in writing within sixty
(60) days after receipt of the written notice of denial. As part of such written request, the
Claiming Party may request a review of the Plan document or other non-privileged documents relevant
to the claim, may submit any written issues and comments, and may request an extension of time for
such written submission of issues and comments.
7.04 Decision upon Review of Denied Claim. The decision on the review of the denied
claim shall be rendered by the Committee within sixty (60) days after receipt of the request for
review. If circumstances require, the Committee may take up to an additional sixty (60) days to
render its decision. The decision shall be in writing and shall state the specific reasons for the
decision, including reference to specific provisions of the Plan on which the decision is based.
ARTICLE VIII.
TRUST
8.01 Establishment of the Trust. The Company may establish a trust, provided that any
trust created by the Company, and any assets held by such trust to assist the Company in meeting
its obligations under this Plan, shall be structured in a way to avoid immediate taxation to
Participants in the Plan. Except in the case of a Change of Control (as defined in the Trust), the
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Company reserves the absolute right, in its sole and exclusive discretion, to direct (or refrain
from directing) the transfer over to the Trust of such assets to the extent the
Company deems
advisable, provided that no such transfer, Trust or other arrangement entered into by the Company
shall affect the status of the Plan as unfunded for purposes of ERISA or the Code.
8.02 Interrelationship of the Plan and the Trust. The provisions of the Plan shall
govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of
the Trust shall govern the rights of the Company, Participants and the creditors of the Company to
the assets transferred to the Trust. The Company shall at all times remain liable to carry out its
obligations under the Plan. The Company’s obligations under the Plan may be satisfied with Trust
assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the
Company’s obligations under this Plan.
8.03 Funding on Change of Control. In the event of a Change of Control (as defined in
the Trust) at any time when the Trust has not been terminated and is not fully funded (as defined
below), the Company shall promptly transfer to the trustee of the Trust assets sufficient to cause
the Trust to be fully funded on the date of such transfer. For purposes of this paragraph, the
Trust shall be “fully funded” on a given date if, on such date, the fair market value of the assets
held by the trustee of the Trust is at least equal to the Actuarial Equivalent present value of:
(i) all benefits under the Plan in pay status to Participants or Beneficiaries on such date; plus
(ii) the fully vested Change of Control Benefit under 6.02. For purposes of this paragraph,
Actuarial Equivalent present value shall be determined using the interest and mortality assumptions
of the Article III Actuarial Equivalent in effect for the month prior to the Change of Control.
8.04 Administration of Trust Assets. Prior to a Change of Control, the Company,
acting through an Administrative Committee established for the purpose of overseeing administration
of the Company’s non-qualified deferred compensation plans, shall direct the Trustee regarding the
investment of Trust assets. On and after a Change of Control, the authority of the Administrative
Committee shall cease, and the Trustee shall have the exclusive authority and responsibility for
the investment of Trust assets, subject to any investment guidelines provided by the Company prior
to the Change of Control.
ARTICLE IX.
PLAN ADMINISTRATION
9.01 Plan Sponsor and Administrator. The Company is the “Plan Sponsor,” and the
Committee is the “Plan Administrator.” The Company’s senior officer with responsibility for Human
Resources and the Company’s Leadership Benefits Department have been selected to assist the
Committee in its day to day responsibilities with respect to the Plan. The Committee, with the
advice of Leadership Benefits, will make such rules and computations and will take such other
actions to administer the Plan as the Committee may deem appropriate.
9.02 Authority of Committee. As Plan Administrator, the Committee has the sole and
exclusive discretion, authority and responsibility to construe and interpret the terms and
provisions of the Plan, to remedy and resolve ambiguities, to grant or deny any and all claims for
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benefits and to determine all issues relating to eligibility for benefits. All actions taken by
the Committee as Plan Administrator, or its delegate, will be conclusive and binding on all persons
having any interest under the Plan, subject only to the provisions of Article VII. All findings,
decisions and determinations of any kind made by the Committee or its delegate shall not be
disturbed unless the Committee has acted in an arbitrary and capricious manner.
9.03 Exercise of Authority. All resolutions or other actions taken by the Committee
shall either: (a) be taken by a vote of a majority of those present at a meeting at which a
majority of the members are present; or (b) be evidenced in a writing adopted by a majority of all
the members in office at the time the action is taken if the Committee acts without a meeting.
9.04 Delegation of Authority. The Committee may delegate all or part of its
responsibilities, authority and discretion under the Plan to other persons. The duties of the
Committee under the Plan will be carried out in its name by the officers, directors and employees
of the Company. Any such delegation shall carry with it the full discretion and authority vested
in the Committee under Section 9.02. The Committee has delegated the day-to-day administration of
the Plan to the Company’s Leadership Benefits Department under the direction of the Company’s
senior officer with responsibility for Human Resources.
9.05 Reliance on Opinions. The members of the Committee and the officers and
directors of the Company, and any employee of the Company who is charged with duties in connection
with the administration of the Plan shall be entitled to rely on all certificates and reports made
by any duly appointed accountants, and on all opinions given by any duly appointed legal counsel,
including legal counsel for the Company.
9.06 Information. The Company shall supply full and timely information to the
Committee on all matters relating to the compensation of
Participants, the date and circumstances of the termination of employment or death of a Participant
and such other pertinent information as the Committee may reasonably require.
9.07 Indemnification. The Company shall indemnify and hold harmless each Committee or
Board member, and each Company employee performing services or acting in any capacity, from and
with respect to the Plan against any and all expenses and liabilities arising in connection with
services performed in regard to this Plan. Expenses against which such individual shall be
indemnified hereunder shall include, without limitation, the amount of any settlement or judgment,
costs, counsel fees and related charges reasonably incurred in connection with a claim asserted, or
a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in
addition to any other rights to which any such individual may be entitled as a matter of law or
other agreement.
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ARTICLE X.
MISCELLANEOUS
10.01 No Employment Contract. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment between the Company and an Executive. Nothing in
this Plan shall be deemed to give an Executive the right to be retained in the service of the
Company or to interfere with any right of the Company to discipline or discharge the Executive at
any time.
10.02 Employee Cooperation. An Executive will cooperate with the Company by
furnishing any and all information reasonably requested by the Company and take such other actions
as may be requested to facilitate Plan administration and the payment of benefits hereunder.
10.03 Illegality and Invalidity. If any provision of this Plan is found illegal or
invalid, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan
shall be construed and enforced as if such illegal and invalid provision had not been included
herein.
10.04 Required Notice. Any notice which shall be or may be given under the Plan shall
be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given
to the Company, such notice shall be addressed to the Company c/o Leadership Benefits, 1700 Seventh
Avenue, Suite 900, Seattle, Washington 98101-4407. If notice is to be given to a Participant, such
notice shall be hand-delivered to the Participant or may be mailed to the last known address of the
Participant on the Company’s Human Resources records. Any party may, from time to time, change the
address to which notices shall be mailed by giving written notice of such new address.
10.05 Interest of Participant’s Beneficiary. The interest in the benefits hereunder
of a spouse or Life Partner of a Participant who, at any time prior to the death of the
Participant, ceases to be the spouse or Life
Partner of the Participant (whether by death, dissolution, annulment, separation, divorce or, in
the case of a Life Partner, the termination of the life partnership), shall automatically pass to
the Participant unless the spouse is required to be treated as the “Surviving Spouse” pursuant to a
court order meeting the requirements of a Qualified Domestic Relations Order, applying rules
analogous to those under Code Section 414(p). A former spouse may not transfer his or her interest
in the Plan in any manner, including but not limited to by his or her will, nor shall such interest
pass under the laws of intestate succession.
10.06 Tax Liabilities from Plan. If an Executive’s participation in this Plan
generates a state or federal tax liability to the Participant prior to commencement of benefit
payments (including a tax liability under Section 409A of the Code), the Committee may exercise its
discretion to authorize a distribution of funds in an amount not to exceed the amount needed to
satisfy such liability (including additions to tax, penalties and interest). A distribution under
this provision is solely at the discretion of the Committee, and the Executive may not elect,
directly or indirectly, to accelerate payment. The Executive’s tax liability shall be measured by
using that Executive’s then current highest federal, state and local marginal tax rate, plus the
rates or
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amounts for the applicable additions to tax, penalties and interest. Such a distribution
shall affect and reduce the benefits to be paid under Articles III and V hereof.
10.07 Benefits Nonexclusive. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Company. The Plan shall
supplement and shall not supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.
10.08 Discharge of Company Obligation. The payment of benefits under the Plan to a
Participant or Beneficiary shall fully and completely discharge the Company, the Board, and the
Committee from all further obligations under this Plan with respect to a Participant, and
participation shall terminate upon such full payment of benefits.
10.09 Costs of Enforcement. If any action at law or in equity is necessary by the
Committee or the Company to enforce the terms of the Plan, the Committee or the Company shall be
entitled to recover reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which that party may be entitled.
10.10 Gender and Case. Unless the context clearly indicates otherwise, masculine
pronouns shall include the feminine and singular words shall include the plural and vice
versa.
10.11 Titles and Headings. Titles and headings of the Articles and Sections of the
Plan are included for ease of reference only and are not to be used for the purpose of construing
any portion or provision of the Plan document.
10.12 Applicable Law. To the extent not preempted by federal law, the Plan shall be
governed by the laws of the State of Washington.
10.13 Counterparts. This instrument may be executed in one or more counterparts, each
of which is legally binding and enforceable.
10.14 Definitions:
(a) “Board” means the board of directors of Nordstrom, Inc.
(b) “Code” means the Internal Revenue Code of 1986, as amended.
(c) “Committee” means the Compensation Committee of the Board.
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This Plan is signed and adopted, pursuant to proper authority, this 19th day of November 2008.
| NORDSTROM, INC. | ||||||
| By: | /s/ Delena Sunday
|
|||||
| Title: | Executive Vice President | |||||
| Human Resources and Diversity Affairs | ||||||
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Exhibit 99.1
FOR RELEASE:
Nov. 19, 2008 at 8:00 a.m. EST |
INVESTOR CONTACT: Chris Holloway Nordstrom, Inc. 206-303-3290 |
|
| MEDIA CONTACT: Brooke White | ||
| Nordstrom, Inc. 206-373-3030 |
NORDSTROM BOARD OF DIRECTORS APPROVES QUARTERLY DIVIDEND
SEATTLE – November 19 – Nordstrom, Inc. (NYSE: JWN) announced today that its board of directors
approved a quarterly dividend of $0.16 per share payable on December 15, 2008, to shareholders of
record on November 28, 2008.
Nordstrom, Inc. is one of the nation’s leading fashion specialty retailers, with 168 U.S. stores
located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 109
full-line stores, 55 Nordstrom Racks, two Jeffrey boutiques, and two clearance stores. In addition,
Nordstrom serves customers through its online presence at www.nordstrom.com and through its
catalogs. Nordstrom, Inc. is publicly traded on the NYSE under the symbol JWN.
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