Exhibit 10.2
Nordstrom, Inc. 2004 Equity Incentive Plan
performance share unit award agreement
05
AN AWARD FOR PERFORMANCE SHARE UNITS for the number of shares
of Common Stock (hereinafter the "Unit") as noted in your
Notice of Award of Performance Share Units (the "Notice"), of
Nordstrom, Inc., a Washington Corporation (the "Company"), is
hereby granted to the "Unit holder" on the date set forth in
your Notice. The Unit is subject to the terms, definitions and
provisions of the Nordstrom, Inc. 2004 Equity Incentive Plan
(the "Plan") adopted by the Company and approved by its shareholders,
which is incorporated in this agreement. Each vested Unit is equal in
value to one share of Nordstrom stock. To the extent inconsistent with
this Agreement, the terms of the Plan shall govern. The Compensation
Committee of the Board has the discretionary authority to construe and
interpret the Plan and this Agreement. The Units are subject to the following:
1. VESTING AND SETTLEMENT OF UNITS
At the end of three fiscal years following
the date of the awards ("the performance
cycle"), units shall vest and be settled in
accordance with the provisions of the Plan
as follows:
(a) Vesting
Except as set forth in paragraph (c), Units
shall vest at the applicable percentage
when the Compensation Committee of the
Board of certifies that (1) the Company's
Total Shareholder Return (TSR) is positive,
and (2) its TSR performance relative to the
TSR of other companies in the comparator
group exceeds the following corresponding
rank on the last day of the performance
cycle:
Relative Rank Percent of Units
Vested
------------- ----------------
1 125%
2 125%
3 100%
4 85%
5 75%
6 75%
7-12 0%
(b) Settlement
Units shall be settled upon vesting, unless
the Unit holder has elected to defer the
Units into the Executive Deferred
Compensation Plan (EDCP). Such deferral
election must be in writing, must be
executed at least 12 months prior to the
beginning of the Plan Year in which the
Units vest, and must be irrevocable. Upon
deferral, the vested Units (and their
subsequent settlement and payment) shall be
governed by the terms and conditions of the
EDCP as that plan may be amended from time
to time by the Company.
At the time of settlement, unless earlier
deferred into the EDCP, the Unit holder
shall elect to receive one share of Common
Stock for each vested Unit or receive an
equivalent amount of cash (in accordance
with procedures established by the
Company). The amount of cash will be
determined on the basis of the market value
of the Common Stock on the last day of the
performance cycle, determined at the time
of vesting.
(c) Withholding Taxes
No stock certificates or cash will be
distributed to the Unit holder, or amounts
deferred into the EDCP, unless the Unit
holder has made acceptable arrangements to
pay any withholding taxes that may be due
as a result of the settlement of this
Award. These arrangements may include
withholding shares of Common Stock that
otherwise would be distributed when the
Units are settled. The fair market value of
these shares, determined though taxes
otherwise would have been withheld in cash,
will be applied to the withholding taxes.
(d) Restrictions on Resale
The Unit holder agrees not to sell any
shares of the Company's stock at a time
when applicable laws or Company policies
prohibit a sale. This restriction will
apply as long as the Unit holder is an
employee, consultant or director of the
Company or a subsidiary or affiliate of the
Company.
2. TERMINATION OF EMPLOYMENT
Except as set forth below, Units vest and
may only be settled while the Unit holder
is an employee of the Company. If the Unit
holder's employment is terminated, the
Units shall continue to vest pursuant to
the schedule set forth in subparagraph 1(a)
above, and the Unit holder or his or her
legal representative shall have the right
to settlement of the
Units after such termination only as
follows:
(a) If the Unit holder dies, the persons to
whom the Unit holder's rights have passed
by will or the laws of descent and
distribution shall be entitled to
settlement of the Units. The Unit holder's
beneficiary(ies) shall be entitled to a
prorated payment with respect to Units
earned during the Performance Cycle based
on their period of service during the term
of this agreement.
(b) If the Unit holder is separated due to
his or her disability, as defined in
Section 22(e)(3) of the Internal Revenue
Code, the Unit holder shall be entitled to
a prorated payment with respect to Units
earned during the Performance Cycle based
on their period of service during the term
of this agreement.
(c) If the Unit holder is separated due to
retirement between the ages of 53 and 57
with 10 years of service to the Company, or
upon attaining age 58, the Unit holder
shall be entitled to a prorated payment
with respect to Units earned during the
Performance Cycle based on their period of
service during the term of this agreement.
(d) If the Unit holder is separated for any
reason other than those set forth in
subparagraphs (a), (b) and (c) above,
Units, to the extent not vested and settled
as of the date of his or her separation,
shall be forfeited as of that date.
Notwithstanding anything above to the
contrary, if during the term of this Award,
the Unit holder directly or indirectly,
either as an employee, employer, consultant,
agent, principal, partner, shareholder,
corporate officer, director or in any other
capacity, engages or assists any third party
in engaging in any business competitive with
the Company; divulges any confidential or
proprietary information of the Company to a
third party who is not authorized by the
Company to receive the confidential or
proprietary information; or uses any
confidential or proprietary information of
the Company, then the post-separation
proration of Units and settlement rights set
forth above shall cease immediately, and all
outstanding vested and unvested portions of
the Award shall be automatically forfeited.
3. TERM
Units not certified by the Compensation
Committee of the Board as having vested as
of the end of the three-year performance
cycle for which the units were awarded,
shall be forfeited.
4. ADJUSTMENTS UPON CHANGES IN
CAPITALIZATION
The number and kind of shares of Company
stock subject to this Award shall be
appropriately adjusted pursuant to the Plan
to reflect any stock dividend, stock split,
split-up or any combination or exchange of
shares, however accomplished.
5. ADDITIONAL UNITS
The Committee may or may not grant you
additional performance share units in the
future. Nothing in this Award or any future
award should be construed as suggesting
that additional unit awards to you will be
forthcoming.
6. RIGHTS AS A SHAREHOLDERS
Neither the Unit holder nor the Unit
holder's representative shall have any
rights as a shareholder with respect to any
Common Shares subject to these Units,
unless and until the Units vest and are
settled in shares of Common Stock of the
Company.
7. NO RETENTION RIGHTS
Nothing in this Agreement or in the Plan
shall give you the right to be retained by
the Company (or a subsidiary of the
Company) as an employee or in any capacity.
The Company and its subsidiaries reserve
the right to terminate your service at any
time, with or without cause.
8. ENTIRE AGREEMENT
The Notice of Award of Performance Share
Units, this Agreement and the Plan
constitute the entire contract between the
parties hereto with regard to the subject
matter hereof. They supersede any other
agreements, representations or
understandings (whether oral or written and
whether express or implied) that relate to
the subject matter hereof.
9. CHOICE OF LAW
The This Agreement shall be governed by,
and construed in accordance with, the laws
of the State of Washington, as such laws
are applied to contracts entered into and
performed in such State.
