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Exhibit 10.40
NORDSTROM
EXECUTIVE DEFERRED COMPENSATION PLAN
(2007 Restatement)
Except as specifically stated, this Restatement applies to amounts deferred
and vested on or after January 1, 2008. Amounts deferred and vested prior to
January 1, 2005 (and investment gains and losses attributable to such
amounts) are governed by the 2003 Restatement and any amendments to the 2003
Restatement. Amounts initially deferred and vested after December 31, 2004
and before January 1, 2008 are subject to the provisions of this Restatement,
except to the extent modified by transition rules separately documented by
the Company.
Lane Powell PC
601 S.W. Second Avenue, Suite 2100
Portland, Oregon 97204
Telephone: (503) 778-2100
Facsimile: (503) 778-2200
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ARTICLE I TITLE, PURPOSE AND EFFECTIVE DATE.................................1
1.1 Title...............................................................1
1.2 Purpose.............................................................1
1.3 Effective Date......................................................1
ARTICLE II ELIGIBILITY.....................................................1
2.1 Eligible Employee...................................................1
2.2 Entry Date..........................................................1
2.3 When Participation Begins...........................................1
2.4 Suspension of Participation.........................................2
2.5 When Participation Ends.............................................2
ARTICLE III DEFERRAL OF COMPENSATION.......................................2
3.1 Deferral Elections..................................................2
3.2 Amount of Deferral..................................................3
3.3 Minimum Deferral....................................................4
3.4 Company Contribution Allocations....................................4
3.5 Deferral of Signing Bonus, Retention Bonus or Separation Payments
Prohibited..................................................................5
3.6 Requirement for Deferral Agreement..................................5
3.7 Applicability of Deferral Agreement.................................5
ARTICLE IV DEFERRAL ACCOUNT AND CREDITING..................................6
4.1 Account.............................................................6
4.2 Time of Crediting Accounts..........................................6
4.3 Participant Deemed Investments......................................6
4.4 Investments by the Company..........................................7
4.5 Limited Effect of Allocation........................................8
4.6 Report of Account...................................................8
ARTICLE V RIGHTS OF PARTICIPANT IN PLAN....................................8
5.1 Ownership Rights in Account.........................................8
5.2 Rights in Plan are Unfunded and Unsecured...........................8
5.3 No Transfer of Interest in Plan Allowed.............................8
5.4 Plan Binding Upon Parties...........................................8
ARTICLE VI DISTRIBUTIONS...................................................9
6.1 Retirement Distributions............................................9
6.2 In-Service Distributions...........................................11
6.3 Pre-Retirement Termination of Employment...........................12
6.4 Payment Commencement Date..........................................12
6.5 Delayed Payment Date...............................................12
6.6 Changing the Time or Form of Distribution..........................13
6.7 Cash and Stock Distributions.......................................13
6.8 Postponement of Non-Deductible Distributions.......................13
6.9 Acceleration of Payment............................................15
ARTICLE VII DEATH BENEFITS................................................15
7.1 Designation of Beneficiary.........................................15
7.2 Married Participants...............................................15
7.3 Deemed Beneficiary.................................................15
7.4 Surviving Beneficiary..............................................11
7.5 Determination of Account Balance at Death..........................16
7.6 Distribution of Account Balance at Death...........................16
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7.7 Determination of Beneficiary.......................................16
7.8 Payments to Minor or Incapacitated Beneficiaries...................17
7.9 Effect of Divorce..................................................17
ARTICLE VIII ADMINISTRATION OF THE PLAN...................................17
8.1 Plan Sponsor and Administrator.....................................17
8.2 Powers and Authority of the Company................................17
8.3 Administrative Committee...........................................18
8.4 Powers and Authority of Leadership Benefits........................19
8.5 Reliance on Opinions...............................................19
8.6 Information........................................................20
8.7 Indemnification....................................................20
ARTICLE IX CLAIMS PROCEDURE...............................................20
9.1 Submission of Claim................................................20
9.2 Denial of Claim....................................................20
9.3 Review of Denied Claim.............................................20
9.4 Decision upon Review of Denied Claim...............................20
ARTICLE X AMENDMENT AND TERMINATION.......................................21
ARTICLE XI MISCELLANEOUS..................................................21
11.1 No Employment Contract............................................21
11.2 Employee Cooperation..............................................21
11.3 Illegality and Invalidity.........................................21
11.4 Required Notice...................................................21
11.5 Interest of Participant's Spouse..................................22
11.6 Tax Liabilities from Plan.........................................22
11.7 Benefits Nonexclusive.............................................22
11.8 Discharge of Company Obligation...................................22
11.9 Costs of Enforcement..............................................22
11.10 Gender and Case...................................................22
11.11 Titles and Headings...............................................22
11.12 Applicable Law....................................................22
11.13 Counterparts......................................................23
11.14 Additional Definitions............................................23
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INDEX OF DEFINED TERMS
<table>
<caption>
Term Defined in Page
Section Number
<s> <c> <c>
Account 4.1 6
Annual Election Period 2.3(a) 2
Base Compensation 3.1(b)(1 3
Board 11.14(a) 23
Change in Control 6.8(c) 14
Claiming Party 9.1 20
Code 11.14(b) 23
Company 1.2 1
Deemed Investment Sub-Account 4.1(a) 6
Deferral Agreement 3.1(a) 2
Deferred Retirement Date 6.1(a)(4) 10
Disabled 3.7 5
Early Retirement Date 6.1(a)(2) 9
Election Period 2.3 1
Eligible Compensation 3.1(b) 3
Eligible Employee 2.1 1
ERISA 1.2 1
Initial Election Period 2.3(b) 2
Leadership Benefits 2.1 1
Leadership Employee 2.1 1
Normal Retirement Date 6.1(a)(3) 10
Participant 2.3 1
Payment Commencement Date 6.4 12
Performance Share Unit 3.1(b)(3) 3
Performance Share Unit Sub-Account 4.1(b) 6
Plan 1.1 1
Plan Administrator 8.1 17
Plan Sponsor 8.1 17
Plan Year 11.14(c) 23
Profit Sharing Plan 3.1(b)(1) 3
Retirement 6.1(a) 9
Specified Employee 6.5 12
Supplemental Executive Retirement Plan (SERP) 6.1(a)(2)(B) 9
Termination Date 6.1(a)(1) 9
Unforeseeable Financial Emergency 6.2(a) 11
Years of Service 6.1(a)(5) 10
</table>
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ARTICLE I
TITLE, PURPOSE AND EFFECTIVE DATE
1.1 Title. This plan shall be known as the Nordstrom Executive Deferred
Compensation Plan, and any reference in this instrument to the "Plan" shall
include the plan as described herein and as amended from time to time.
1.2 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, within the
meaning of Section 201(2), 301(a)(3) and 401(a)(4) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), of Nordstrom, Inc., a Washington
corporation, and its participating subsidiaries and affiliates ("Company").
1.3 Effective Date. The Plan was originally effective as of January 1,
1994. The Plan was subsequently amended on a number of occasions and most
recently was restated effective January 1, 2003. Except as specifically
stated to the contrary, this restatement applies only to amounts deferred and
vested on or after January 1, 2008. Amounts deferred and vested prior to
January 1, 2005 (and investment gains and losses attributable to such
amounts) are governed by the 2003 Restatement and any amendments to the 2003
Restatement. Amounts initially deferred and vested after December 31, 2004
and before January 1, 2008 are subject to the provisions of this Restatement,
except to the extent modified by transition rules separately documented by
the Company.
ARTICLE II
ELIGIBILITY
2.1 Eligible Employee. An "Eligible Employee" means, for any Plan Year, any
employee of the Company who: (a) is employed in a "Leadership" capacity as
defined by the Company's Human Resources Department; and (b) has current
annualized Base Compensation (as defined in 3.1(b)(1)) of not less than
eighty-five thousand dollars ($85,000); and (c) has been designated as
eligible by the Company's Leadership Benefits Department ("Leadership
Benefits"). Subject to the provisions of the Plan, all Eligible Employees
will be eligible to defer compensation and receive benefits at the time and
in the manner provided hereunder.
2.2 Entry Date. An Eligible Employee shall be eligible to participate in
the Plan on the March 1, June 1, September 1 or November 1 following the date
he or she first becomes an Eligible Employee.
2.3 When Participation Begins. An Eligible Employee becomes a
"Participant" in the Plan for the Plan Year when he or she elects to defer a
portion of Eligible Compensation (defined in 3.1(b)) during the applicable
Election Period pursuant to the terms of the Plan and Article III. The
"Election Period" is either the Annual Election Period or, for newly eligible
Employees, the Initial Election Period, determined as follows:
(a) Annual Election Period. "Annual Election Period" means the period
designated each year during which Eligible Employees submit their elections
to defer compensation. Leadership Benefits has discretion to establish the
Annual Election Period and may establish different Annual Election Periods
for different types of compensation, provided that annual elections must
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become irrevocable not later than the time specified under Code Section 409A.
A Participant's deferral election with respect to Base Compensation and Bonus
Compensation at an Annual Election Period must become irrevocable not later
than December 31 of the year preceding the year in which the Participant
performs services generating the Base Compensation and the Bonus
Compensation.
(b) Initial Election Period. The Initial Election Period for any employee
who first becomes an Eligible Employee during the Plan Year is the period of
thirty (30) days that begins on his or her Entry Date under 2.2. An Eligible
Employee's election relates only to Compensation paid for services to be
performed subsequent to the election and applies only to Base Compensation.
Deferral of Bonus Compensation and Performance Share Units can be elected
only during an Annual Election Period.
2.4 Suspension of Participation. If a Participant receives an unscheduled
in-service distribution (with penalty) under the 2003 Restatement of this
Plan, the Participant's eligibility to defer under this Plan shall continue
for the remainder of the Plan Year in which the unscheduled in-service
distribution is received, but shall be suspended for the next two Plan Years.
2.5 When Participation Ends. An individual remains a Participant as long as
he or she has an Account balance that has not yet been entirely distributed.
If, prior to a Participant's Termination Date, a Participant has ceased to be
a member of a select group of management or highly compensated employees of
the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(4) of
ERISA, such Participant's deferral elections shall continue for the remainder
of the Plan Year to which the deferral elections relate. However, the
Participant shall become ineligible to defer compensation under the Plan
effective with the next Plan Year, and the Participant shall not re-establish
eligibility to defer compensation until such time as he or she once again
becomes a member of a select group of management or highly compensated
employees. The Participant's Account will be distributed at the time and in
the form specified by the terms of the Plan and the Participant's elections.
ARTICLE III
DEFERRAL OF COMPENSATION
3.1 Deferral Elections. Upon becoming eligible to be a Participant under
Section 2.2, and for any Plan Year thereafter (subject to Sections 2.4 and
2.5), an Eligible Employee who wishes to defer compensation under this Plan
must properly execute a Deferral Agreement on or before the last day of the
applicable Election Period.
(a) Deferral Agreement. As used in this Plan, the term "Deferral Agreement"
means the form prescribed by Leadership Benefits, by which the Participant:
(1) indicates and agrees to defer a portion of the Participant's Eligible
Compensation for any Plan Year; and
(2) specifies the time and form of payment for amounts deferred for the Plan
Year.
For this purpose, an Eligible Employee will be considered to have properly
executed a Deferral Agreement when he or she has enrolled via an online
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system, or completed, signed and returned the appropriate form of Deferral
Agreement to Leadership Benefits, each in a manner approved by Leadership
Benefits.
(b) Eligible Compensation. For purposes of this Plan, the following items
of a Participant's remuneration shall be considered "Eligible Compensation":
(1) Base Compensation. A Participant's Base Compensation, which means a
Participant's base salary scheduled to be paid in the normal course through
the Company's regular payroll cycles (including amounts characterized by the
Company as International Premium Pay). Deferrals to this Plan are calculated
and deducted before any deferrals under the Nordstrom 401(k) Plan & Profit
Sharing ("Profit Sharing Plan"), the Company's cafeteria plan under Code
Section 125, and the Company's transportation fringe benefits plan under Code
Section 132(f).
(2) Bonus Compensation. A Participant's Bonus Compensation, scheduled to be
paid to the Participant in cash. Bonus Compensation means the amount,
determined annually based on the Participant's job performance and other
factors, that is paid to the Participant in excess of the Participant's Base
Compensation.
(3) Performance Share Units. A Participant's Performance Share Units as
defined in and governed by the separately stated Nordstrom, Inc. 2004 Equity
Incentive Plan (as it may be amended from time to time).
3.2 Amount of Deferral. A Participant may, for any Plan Year, irrevocably
elect to have the following amounts of Eligible Compensation deferred and
credited to the Participant's Account in accordance with the terms and
conditions of the Plan:
(a) Base Compensation. All or a portion of the Participant's Base
Compensation, expressed as either a percentage or a flat dollar amount,
provided that, for Participants enrolling during an Annual Election Period
under 2.3(a), the deferral may not reduce the Participant's Base Compensation
for the Plan Year below $50,000.
(b) Bonus Compensation. For Participants electing deferrals during an
Annual Election Period under 2.3(a), all or a portion of the Participant's
Bonus Compensation that is attributable to services to be performed beginning
in the Plan Year immediately following the Annual Election Period. Employees
who become new Participants and who elect to enroll during an Initial
Election Period under 2.3(b) may not defer Bonus Compensation payable for the
Plan Year during which their enrollment occurs.
(c) Performance Share Units. All or a portion of a Participant's unvested
Performance Share Units awarded by the Company, provided that:
(1) The Performance Share Units are scheduled to vest based on the
Participant's achievement of individual or organizational performance
criteria that are established within the first 90 days of a performance cycle
that will last at least 12 months;
(2) The deferral election is made at a time when at least six months remain
in the performance cycle;
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(3) The Participant provides services continuously for the period from the
first day of the performance cycle (or if later, the date the performance
criteria are established) through the date that the deferral election is
made; and
(4) The deferral election is made before the amount of the Performance Share
Units that will vest is readily ascertainable.
3.3 Minimum Deferral. Each Participant must agree to defer a minimum of
five thousand dollars ($5,000) from his or her Base Compensation or Bonus
Compensation (or a combination of Base and Bonus Compensation) per Plan Year;
provided, however, that this minimum need not be met if Eligible Compensation
actually paid is insufficient to yield such minimum deferral in accordance
with the Participant's Deferral Election.
3.4 Company Contribution Allocations. The following Company contributions
are permitted under the Plan:
(a) Make-up Contribution. Each Plan Year, the Company shall allocate to each
Participant's Account an amount corresponding to the Participant's lost share
of Company contributions to its Profit Sharing Plan, determined as follows:
(i) an amount, if any, equal to such Participant's lost share of non-elective
contributions under the Company's Profit Sharing Plan; and (ii) an amount, if
any, equal to such Participant's lost share of matching contributions under
the 401(k) feature of the Profit Sharing Plan. For purposes of this
allocation, a Participant's "lost share" of non-elective and matching
contributions is the amount of contributions not made to the Participant's
account in the Profit Sharing Plan because of (a) the reduction in the
Participant's compensation (as defined by those plans) by reason of deferrals
under this Plan, and (b) the Participant's exclusion under those plans'
provisions as a highly compensated employee in his or her first or second
year of participation, as applicable. The time and form of payment of Make-
up Contributions shall be determined by the Participant's deferral elections
applicable for Base Compensation paid during the Plan Year preceding the Plan
Year in which the Make-up Contribution is actually credited to the
Participant's Account.
(b) Company Discretionary Contributions. In addition to any Company
contributions made in accordance with 3.4(a), the Company may, in its sole
discretion, make discretionary contributions to the Accounts of one or more
Participants at such times, in such amounts, and vested in such manner, as
the Board or the Compensation Committee may determine. Such discretionary
contributions shall be credited to the applicable Participant's Deemed
Investment Sub-Account. The Company must designate the time and form of
distribution at the time that the discretionary contributions are allocated
to the Participant's Account.
3.5 Deferral of Signing Bonus, Retention Bonus or Separation Payments
Prohibited. A Participant may not defer any amounts paid to the Participant
that are designated by the Company as a signing bonus, a retention bonus, or
separation payments. A "signing bonus" is any amount paid to a newly hired
Employee specifically as an incentive to accept a position with the Company.
A "retention bonus" is any amount paid to an existing Employee specifically
in exchange for an agreement to remain an Employee of the Company for a
specified period. A "separation payment" is any amount paid to an Employee
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as a result of termination of employment with the Company; provided, however,
that nothing in this Section 3.5 shall prevent the Company from negotiating a
separation agreement, the provisions of which include a Company Discretionary
Contribution under Section 3.4(b).
3.6 Requirement for Deferral Agreement. A Participant who has not timely
submitted a valid Deferral Agreement may not defer any Eligible Compensation
(or receive the corresponding Company Make-up Contribution allocation under
3.4) for the applicable Plan Year under the Plan.
3.7 Applicability of Deferral Agreement. A Deferral Agreement remains in
effect for the entire Plan Year to which it applies; provided that deferrals
shall be canceled for the remainder of the Plan Year (or, if longer, for a
period of six months) if: (a) the Participant 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). A Deferral Agreement shall also 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. A Participant must file a new
Deferral Agreement for each Plan Year. The terms of any Deferral Agreement
may, but need not be, similar to the terms of any prior Deferral Agreement.
ARTICLE IV
DEFERRAL ACCOUNT AND CREDITING
4.1 Account. A Participant's "Account" is the account established on the
books of the Company as a record of each Participant's Plan balance. An
Account may, at the discretion of the Administrative Committee, include one
or more sub-accounts to reflect amounts credited to a Participant under the
various terms of the Plan. As of the effective date of this Restatement, the
Administrative Committee has established the following sub-accounts:
(a) Deemed Investment Sub-Account: A Deemed Investment Sub-Account,
reflecting the Participant's account balance resulting from the deferral of
Eligible Compensation (other than Performance Share Units or other stock-
based compensation), Company Contribution allocations under Section 3.4, and
the Participant's deemed investment of such amounts under Section 4.3. The
balance in such sub-account shall be expressed as a dollar amount.
(b) Performance Share Unit Sub-Account. A Performance Share Unit Sub-
Account reflecting the number of Performance Share Units or other stock-based
compensation in which the Participant is vested and which the Participant has
deferred under the Plan. The balance in such sub-account shall be expressed
in units, with each unit representing the value of one share of the Company's
Common Stock.
4.2 Time of Crediting Accounts. Amounts deferred by a Participant under the
Plan and any Company Contribution allocations made on behalf of that
Participant shall be credited to the Participant's Account as soon as
administratively practicable after the date deferred amounts would otherwise
have been received (or beneficially received in the case of Company
contributions) by the Participant. Subject to 4.4(c)(2) regarding the
underwriting of the Plan's investment vehicles, Earnings shall be credited to
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a Participant's Account on the date determined by the Administrative
Committee, but no later than the month following the month in which deferrals
and Company contributions were credited to the Account in accordance with the
preceding sentence. Earnings are based on the performance of the investment
options selected by Participants in accordance with Section 4.3.
4.3 Participant Deemed Investments. Subject to Section 4.3(b), each
Participant may, from time to time, select from the various indices provided
by the Administrative Committee (under Section 4.4(b)) in which his or her
Account will be deemed invested; provided, however, that the Administrative
Committee is under no obligation to acquire or provide any of the investments
designated by the Participant.
(a) Deemed Investment Sub-Account Valuation. A Participant's Deemed
Investment Sub-Account shall be credited or debited from time to time, as
determined by the Administrative Committee, with additional amounts equal to
the appreciation (or loss) such accounts would have experienced had they
actually been invested in the specified fund indices at the relevant times.
This crediting and debiting will take into account the date that a
Participant's Account transactions (such as deferrals, contributions,
distributions and transfers among funds) are actually reflected by the Plan's
record-keeping system.
(b) Performance Share Unit Sub-Account Valuation. The number of units in a
Participant's Performance Share Unit Sub-Account shall be appropriately
adjusted periodically to reflect any dividend, split, split-up or any
combination or exchange, however accomplished, with respect to the shares of
the Company's common stock represented by such units.
4.4 Investments by the Company. In order to provide funds to satisfy its
obligations under the Plan, the Company may, but shall not be required to,
keep cash or invest and reinvest in mutual funds, stocks, bonds, securities
or any other assets as may be reasonably selected by the Administrative
Committee in its discretion. Such investments may, but need not, follow the
investment indices chosen by the Participants.
(a) Investment Advice. In the exercise of the foregoing investment powers,
the Administrative Committee may engage investment consultants and, if the
Administrative Committee so desires, may delegate to such consultants full or
limited authority to select the assets in which the funds are to be selected.
Investment consultants may be officers or employees of the Company or outside
consultants.
(b) Choice of Investment Indices. The Administrative Committee, or its
investment consultants, may specify one or more investment funds to serve as
indices for the investment performance of amounts credited under the
Accounts. The Administrative Committee has the authority to expand or limit
the type or number of fund indices and to prescribe, in conjunction with
Leadership Benefits, the frequency with which Participants may change their
deemed investment elections.
(c) Insurance. If the Administrative Committee elects to purchase an
insurance policy or policies insuring the life of the Participant to allow
the Company to recover the cost of providing the benefits hereunder:
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(1) The Participant shall, as a condition to continued participation in the
Plan, sign any papers and undergo any medical examinations or tests that may
be necessary or required for such purpose;
(2) Notwithstanding the Participant's election or direction or any provision
in the Plan to the contrary, the Participant's Account may be deemed invested
in a money market fund or instrument or other liquid asset selected by the
Administrative Committee or its delegate, pending the underwriting and
delivery of such policy or annuity; and
(3) The Participant, Participant's Beneficiary, and any other person
claiming through the Participant shall not have or acquire any rights
whatsoever in such policy or policies or in the proceeds of the policies.
4.5 Limited Effect of Allocation. The fact that any allocation shall be
made and credited to an Account shall not vest in a Participant any right,
title or interest in or to any assets of the Company, or in any right to
payment, except at the time(s) and upon the conditions elsewhere set forth in
the Plan.
4.6 Report of Account. A Participant shall be provided information
regarding Participant's Bookkeeping Account balance within a reasonable time
after requesting such information from Leadership Benefits. Leadership
Benefits shall furnish each Participant statements on a periodic basis, no
less frequently than annually, as soon as administratively practicable after
the allocations for the end of the Plan Year have been completed. Leadership
Benefits may, in its discretion, provide Participants with account balance
statements more frequently than provided in the preceding sentence.
ARTICLE V
RIGHTS OF PARTICIPANT IN PLAN
5.1 Ownership Rights in Account. Subject to the restrictions provided in
this Article and in Section 3.2(c), each Participant shall at all times have
a vested right to the value of such Participant's Account.
5.2 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 to payment 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 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 subject to
the claims of its general creditors in the event of the Company's insolvency.
5.3 No Transfer of Interest in Plan Allowed. Except as permitted by
applicable law, no sale, transfer, alienation, assignment, pledge,
collateralization or attachment of any benefits under the Plan shall be valid
or recognized by the Company. The Participant, the Participant's spouse and
a designated Beneficiary shall not have any power to hypothecate, mortgage,
commute, modify or otherwise encumber in advance any of the benefits payable
under the Plan. Said benefits shall not be subject to seizure for the
payment of any debts, judgments, alimony, maintenance owed by the Participant
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or a Beneficiary, or be transferable by operation of law in the event of
bankruptcy, insolvency, or otherwise. Notwithstanding the foregoing, the
Company may, if the Administrative Committee so determines in its sole
discretion, follow the terms of any court order issued in connection with any
domestic relations proceeding including but not limited to marital
dissolution or child support.
5.4 Plan Binding Upon Parties. The Plan shall be binding upon the Company,
its assigns, and any successor company that acquires substantially all of its
assets and business through merger, acquisition or consolidation; and upon
all Participants and any Participant's Beneficiaries, assigns, heirs,
executors and administrators.
ARTICLE VI
DISTRIBUTIONS
6.1 Retirement Distributions.
(a) Retirement Events. A Participant may elect in a Deferral Agreement to
receive a distribution of his or her Account at Retirement. A Participant's
"Retirement" shall mean the Participant's Termination Date coinciding with an
Early Retirement Date, Normal Retirement Date or Deferred Retirement Date,
each as defined below.
(1) Termination Date. Termination Date shall mean the termination of a
Participant's employment with the Company, and each of its subsidiaries and
affiliates, whether or not the subsidiary or affiliate participates in this
Plan. A termination of employment is deemed to have occurred for purposes of
this Plan on the date when the Participant and the Company reasonably
anticipate that the level of bona fide services to be provided by the
Participant will be permanently reduced to 49 percent or less of the average
level of bona fide services provided in the immediately preceding period of
36 consecutive months. If the Participant is on a paid leave of absence, the
Participant is treated as providing services at a level equal to the level of
services that the Participant would have been required to perform to earn the
amount of compensation paid during the paid leave of absence. If the
Participant is on an unpaid leave of absence, the employment relationship is
presumed to terminate on the earlier of (A) the date the Participant loses
his or her statutory or contractual right to re-employment (but not sooner
than six months after the unpaid leave of absence began) or (B) the date that
there is no longer a reasonable expectation that the Participant will return
to perform services for the Company.
(2) Early Retirement Date. Early Retirement shall mean (A), (B), or (C), as
applicable:
(A) Eligible August 19, 2003. For a Participant who had attained at least
fifty (50) years of age and had completed at least ten (10) years of service
on August 19, 2003, Early Retirement Date shall mean the Participant's
Termination Date.
(B) 1999 Plan Executives under SERP. For a Participant who is designated as
a 1999 Plan Executive under the Company's Supplemental Executive Retirement
Plan ("SERP"), Early Retirement shall mean such Participant's Termination
Date on or after the date the Participant has both attained age 50 and
completed at least ten (10) years of service.
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(C) All Other Participants. For a Participant who was not eligible for Early
Retirement on August 19, 2003, and who is not a 1999 Plan Executive under the
SERP, Early Retirement shall mean the Participant's Termination Date on or
after the date the Participant has both attained age 53 and has completed at
least ten (10) years of service with the Company.
(3) Normal Retirement Date. A Participant's Normal Retirement Date under
this Plan shall be his or her 58th birthday; provided, however, that the
Normal Retirement Date for a Participant who was designated in 2003 as a
Transition Plan Executive under the SERP shall be age 55.
(4) Deferred Retirement Date. A Participant's Deferred Retirement Date
is the Termination Date that occurs after his or her Normal Retirement Date.
(5) Years of Service. For purposes of this Plan, years of service are
measured in consecutive full years (i.e., 12 months), based on service from
the Participant's most recent date of hire.
(b) Retirement Distribution Forms. Distribution of a Participant's Account
balance shall be made according to the distribution options specified in the
Participant's Deferral Agreement(s). Portions of Accounts subject to
installment payment shall continue to be valued as provided in Section 4.3
until distributed. The distribution options available to a Participant are:
(1) single lump sum payment; or (2) installment payments for a period of
five, ten or fifteen years.
(c) Lump Sum in Lieu of Installments. If the Participant's Account balance
as of his or her Retirement is equal to or less than $10,000, Leadership
Benefits may order the distribution of the Participant's entire Account in a
single lump sum rather than in installments, provided that the lump sum
payment results in the termination and liquidation of the Participant's
entire interest under this Plan and all other plans or arrangements that must
be aggregated with this Plan under the rules set forth under Code Section
409A. The Participant may not exercise any discretion to convert an
installment election into a lump sum under this provision.
(d) Amount and Timing of Installment Payments. The first installment shall
be paid on the Payment Commencement Date as defined in 6.4. Subsequent
installments shall be paid annually in January of each succeeding year. The
amount of each installment shall be determined by multiplying the
Participant's account balance as of the last day of the month immediately
preceding the distribution date by a fraction, the numerator of which is one
(1) and the denominator of which is (N minus P), where N is the total number
of annual installments and P is the number of annual installments previously
paid to the Participant. For example, if the form of payment is five annual
installments, the first annual distribution is the account balance divided by
5 (5 minus 0), the second annual distribution is the account balance divided
by 4 (5 minus 1), the third annual distribution is the account balance
divided by 3 (5 minus 2), the fourth annual distribution is the account
balance divided by 2 (5 minus 3), and the fifth annual distribution is the
entire remaining account balance (5 minus 4).
6.2 In-Service Distributions. While a Participant is employed by the
Company, a subsidiary or affiliate, the Participant may receive in-service
Plan distributions as provided in this Section 6.2.
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(a) Unforeseeable Financial Emergency. At the request of a Participant, the
Administrative Committee may, in its sole discretion, pay all or part of the
value of the Participant's Account in the event of an unforeseeable financial
emergency.
(1) Financial Emergency. In this context, an "unforeseeable financial
emergency" is defined as a severe financial hardship resulting from one of
the following:
(A) illness or accident of the Participant, the Participant's spouse or
dependent (as defined in Code Section 152(a)), or the Participant's
designated Beneficiary;
(B) loss of the Participant's property due to casualty; or
(C) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant.
(2) Amount. The amount of an accelerated distribution shall be limited to
an amount necessary to relieve such emergency, which may include amounts
necessary to pay any federal, state, and local taxes or penalties reasonably
anticipated to result from the distribution. Amounts available to the
Participant due to the cancellation of the Participant's deferral election
for the remainder of the Plan Year must be taken into account in determining
the amount necessary to satisfy the emergency need.
(3) Effect of Other Financial Resources. A distribution on account of
unforeseeable emergency may not be made to the extent that such emergency is
or may be alleviated by reimbursement or compensation from insurance,
liquidation of other assets (provided that the liquidation would not itself
cause a severe hardship), or the cancellation of deferrals for the remainder
of the Plan Year under the Plan.
(b) Scheduled Distributions. During any Election Period, a Participant may,
in connection with his or her election to defer compensation, specify a
withdrawal date for all or part of his or her compensation deferred pursuant
to the election made during the Election Period. A Participant's scheduled
distribution election must specify a distribution date that occurs after the
Participant's deferrals that are subject to the election have been in the
Plan for at least two complete Plan Years (for example, deferrals elected
during the 2007 Annual Election Period can first be scheduled for
distribution in 2011). The Participant must elect the calendar year and the
month (either January or June) of the scheduled distribution. The amount
payable to a Participant in connection with a scheduled distribution shall in
all cases be a specified dollar amount or a specified percentage of the
Participant's Account balance for the Plan Year to which the Deferral
Agreement applies. If a distribution event occurs with respect to a
Participant before the scheduled distribution date, the Plan provisions
applicable to the distribution event will take precedence over the
Participant's scheduled distribution election.
6.3 Pre-Retirement Termination of Employment. If a Participant's
Termination Date occurs prior to Retirement, the time and form of payment
elections in the Participant's Deferral Agreements shall be disregarded and,
in lieu of those elections, the Participant shall receive the value of his or
her Account in a single lump sum payment on the Payment Commencement Date.
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6.4 Payment Commencement Date. Distributions will begin to be paid on the
following dates, subject to the delay for Specified Employees set forth in
6.5.
(a) Scheduled Distribution. During the calendar month (January or June)
and year specified by the Participant in his or her deferral election.
(b) Retirement Distributions. Within 90 days after Leadership Benefits
confirms the Retirement, provided that the Participant does not have the
right to designate the taxable year of payment.
(c) Non-Retirement Termination of Employment. Within 90 days after
Leadership Benefits confirms the Termination Date, provided that the
Participant does not have the right to designate the taxable year of payment.
(d) Unforeseeable Financial Emergency. Within 90 days after Leadership
Benefits receives confirmation of the amount of distribution approved by the
Administrative Committee, provided that the Participant does not have the
right to designate the taxable year of payment.
6.5 Delayed Payment Date. If a distribution is made to a Specified Employee
following his or her Retirement or other Termination Date, the first payment
may not be made earlier than six months after the Specified Employee's
Payment Commencement Date. If the form of distributions is installments, any
installments that would have been paid in the absence of this six-month delay
will be accrued and paid at the end of the six-month period. Any
installments that are due after the six-month period expires will be paid as
if they were not subject to this provision. A Specified Employee means an
individual who meets the requirements to be a "key employee" as defined in
Code Section 416(i) (without regard to Section 416(i)(5)). If the individual
is a key employee as of September 30 of a given year, the individual is
treated as a Specified Employee for the entire next calendar year. This
delayed payment date rule does not apply to scheduled in-service
distributions, financial emergency distributions, or distributions due to the
Participant's death.
6.6 Changing the Time or Form of Distribution. The time and form of payment
elected in a Participant's Deferral Agreements cannot be changed by the
Participant after the last day of an Election Period except as provided in
this section. A Participant may change his or her form of Retirement
distribution under 6.1(b) or the timing of a scheduled in-service
distribution under 6.2(b), provided that:
(a) For a scheduled in-service or Retirement distribution, his or her change
is filed with Leadership Benefits no later than the last day of the Plan Year
that ends at least 12 months before the Payment Commencement Date;
(b) His or her change cannot take effect earlier than twelve months after
the change is requested; and
(c) the first payment under the newly elected form of payment cannot be made
sooner than five years after the Payment Commencement Date for the form of
payment that the Participant has elected to change.
The Payment Commencement Date for a series of installment payments is treated
as the date on which the first of such installment payments would be made
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under the terms of this Plan. Where the Payment Commencement Date is stated
as a period of time (e.g., a 90-day period following a distribution event),
the Payment Commencement Date for purposes of this section is the first day
of such period.
6.7 Cash and Stock Distributions. Distributions of a Participant's Deemed
Investment Sub-Account Account shall be made in cash only. Distributions of
a Participant's Performance Share Unit Sub-Account shall be made in Common
Stock of the Company.
6.8 Postponement of Non-Deductible Distributions.
(a) When Applicable. If the Administrative Committee determines in good
faith prior to a Change in Control that there is a reasonable likelihood that
any Compensation paid to a Participant for a taxable year of the Company
would not be deductible by the Company solely by reason of the limitation
under Code section 162(m), then to the extent deemed necessary by the
Administrative Committee to ensure that the entire amount of any distribution
to the Participant pursuant to this Plan prior to the Change in Control is
deductible, the Administrative Committee may defer all or any portion of the
distribution. After a Change in Control, the Administrative Committee shall
not have discretion to postpone payments under this provision, and all
payments will be made on the dates provided in the Plan.
(b) Administration of Deferred Distributions. Any distributions deferred
pursuant to this limitation shall continue to be credited with interest or
earnings pursuant to the terms hereof. Where a payment to a Participant is
delayed under this provision, all other payments to that same Participant
that could be delayed under this provision must also be delayed. The amounts
so deferred and interest thereon shall be distributed to the Participant or
his or her Beneficiary (in the event of a death benefit required hereunder)
at the earliest possible date, as determined by the Administrative Committee
in good faith, on which the deductibility of compensation paid or payable to
the Participant for the taxable year of the Company during which the
distribution is made will not be limited by Code section 162(m), or if
earlier, the effective date of a Change in Control.
(c) "Change in Control" Defined. For purposes of this Plan, Change in
Control means the first of the following (1), (2), or (3) to occur.
(1) Change in Ownership of Stock. Any person, entity or group of persons
purchases or acquires, within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 ("Act"), or any comparable successor
provisions, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Act) of Company stock that, together with stock already
held by such person, entity, or group, constitutes more than 50% of the total
fair market value or total voting power of the stock of the Company.
(2) Change in Effective Control. Either of the following occurs,
representing a change in effective control of the Company:
(A) Voting Power. Any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by the person or group) ownership of
Company stock constituting 30% or more of the total voting power of Company
stock; or
<page>
(B) Board Composition. A majority of the members of the Company's Board of
Directors is replaced during any period of 12 consecutive months by directors
whose appointment or election is not endorsed by a majority of the members of
the Company's Board of Directors prior to the date of the appointment or
election.
(3) Change in Ownership of Assets. Any one person, or more than one person
acting as a group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
Company assets that have a total gross fair market value equal to or greater
than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions. Gross value
means the value of the assets determined without regard to any liabilities
associated with such assets. However, a Change in Control does not occur to
the extent that ownership of assets is transferred to:
(A) a Company shareholder (immediately before the asset transfer) in
exchange for or with respect to his or her Company stock;
(B) an entity, 50% or more of the total value or voting power of which is
owned directly or indirectly by the Company;
(C) a person, or more than one person acting as a group, that owns directly
or indirectly 50% or more of the total value or voting power of the Company;
(D) an entity, at least 50% of the total value or voting power of which is
owned directly or indirectly by a person described in (C).
(4) Interpretation. These provisions shall be interpreted and applied in a
manner that is consistent with Department of Treasury regulations under
Section 409A of the Code.
6.9 Acceleration of Payment. Generally, neither the Company nor any
Participant may accelerate the timing of any payment under the Plan, except
as specifically set forth in this Plan document. However, the Administrative
Committee retains the discretion to accelerate distribution of any payment to
the extent such acceleration is specifically permitted under the final
regulations under Code Section 409A. Such accelerations include, but are not
limited to, a distribution to permit a Participant to pay taxes on amounts
deferred under this Plan, including any taxes that may be imposed under Code
Section 409A.
ARTICLE VII
DEATH BENEFITS
7.1 Designation of Beneficiary. A Participant shall designate a Beneficiary
to receive death benefits under the Plan by completing the beneficiary
designation form specified by the Administrative Committee. A Participant
shall have the right to change the Beneficiary by submitting a form
designating the Participant's change of Beneficiary in accordance with
procedures established by the Administrative Committee. No beneficiary
designation or change of beneficiary shall be effective until approved by
Leadership Benefits.
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7.2 Married Participants. If a Participant is married, his or her legal
spouse shall be the designated Beneficiary, unless the spouse consents in
writing to designation of a different Beneficiary on a form acceptable to the
Administrative Committee.
7.3 Deemed Beneficiary. If no designation has been made, or if the
Beneficiary has predeceased the Participant, then the Participant will be
deemed to have designated the following as his or her surviving beneficiaries
and contingent beneficiaries with priority in the order named below:
(a) first, to his widow or her widower, or his or her registered life
partner, as the case may be;
(b) next, to his or her children, in equal shares;
(c) next, to his or her parents, in equal shares;
(d) next, to his or her brothers and sisters, in equal shares; or
(e) next, to his or her estate.
7.4 Surviving Beneficiary. For purposes of determining the appropriate
named or deemed beneficiary or contingent beneficiary, an individual is
considered to survive the Participant if that individual is alive seven (7)
days after the date of the Participant's death.
7.5 Determination of Account Balance at Death. The value of a Participant's
Account shall be determined as of the later of: (a) the date of the
Participant's death; or (b) the date the Administrative Committee approves
the distribution under Section 7.6. The amounts in such Account shall be
maintained in the deemed investment Sub-Accounts under Section 4.3 after the
Participant's death and until the time of distribution, unless the
Participant's Beneficiary elects in writing to transfer such amounts from the
deemed investment accounts into a separate interest-bearing account
designated by the Administrative Committee for this purpose. Upon transfer
to the interest-bearing account, the Account shall no longer be deemed
invested under Section 4.3(a) and will not be adjusted for deemed investment
gains and losses.
7.6 Distribution of Account Balance at Death. Upon a Participant's death,
the value of Participant's Account shall be distributed as follows:
(a) Death Prior to Retirement. If a Participant dies before Retirement, the
Participant's Beneficiary shall receive the balance of the Participant's
Account. Additionally, if the Participant dies while an employee of the
Company and such Participant's death is not attributable to suicide committed
within two years after becoming a Participant, such Beneficiary shall receive
an amount equal to twice the Participant's actual deferrals under Section 3.2
that have been credited to the Participant's Account as of December 31, 2007
(exclusive of any earnings thereon). Compensation deferred after December
31, 2007 shall not be taken into account in calculating this pre-retirement
death benefit. This pre-retirement death benefit shall be paid as a lump sum
in the Plan Year containing the Participant's death. A lump sum payment will
be treated as having been made in the Plan Year containing the Participant's
death as long as the payment is made not later than the 15th day of the third
month of the following year.
(b) Death After Retirement. If a Participant dies after Retirement, the
Participant's Beneficiary shall receive the Participant's remaining Account
<page>
balance in the form designated in the Participant's distribution election
under Section 6.1 together with amounts credited under Section 7.5.
7.7 Determination of Beneficiary. If the Administrative Committee has any
doubt as to the proper Beneficiary to receive payments hereunder, the
Administrative Committee shall have the right to direct the Company to
withhold such payments until the matter is finally adjudicated. However, as
provided in Section 11.8, any payment made by the Company, in good faith and
in accordance with the Plan and the directions of the Administrative
Committee shall fully discharge the Company, the Board and the Administrative
Committee from all further obligations with respect to that payment.
7.8 Payments to Minor or Incapacitated Beneficiaries. In making
distributions from the Plan to or for the benefit of any minor or
incapacitated Beneficiary, the Administrative Committee, in its sole and
absolute discretion, may direct the Company to make such distribution to a
legal or natural guardian of such Beneficiary, or to any adult with whom the
minor or incompetent temporarily or permanently resides. The receipt by such
guardian or other adult shall be a complete discharge of liability to the
Company, the Board, and the Administrative Committee. Neither the Board, the
Administrative Committee, nor the Company shall have any responsibility to
see to the proper application of any payments so made.
7.9 Effect of Divorce. If a Participant and his or her Designated
Beneficiary are or become married and thereafter their marriage is dissolved
by entry of a decree of dissolution or other court order having the effect of
dissolving the marriage, then any such pre-divorce Beneficiary designation
shall be deemed automatically revoked as to such Beneficiary spouse as of the
date of such dissolution unless the death benefit rights of such former
spouse are subsequently reaffirmed by a qualified domestic relations order or
the Participant's subsequent written designation.
ARTICLE VIII
ADMINISTRATION OF THE PLAN
8.1 Plan Sponsor and Administrator. The Company is the "Plan Sponsor," and
its address is: Nordstrom, Inc., 1700 Seventh Avenue, Seattle, Washington
98101-4407. The Administrative Committee is the "Plan Administrator."
8.2 Powers and Authority of the Company. The Company, acting through the
Compensation Committee of its Board of Directors, has the following absolute
powers and authority under the Plan:
(a) To amend or terminate the Plan, at any time and for any reason;
(b) To determine the amount, timing, vesting, and other conditions
applicable to Plan contributions and benefits;
(c) To set aside funds to assist the Company to meet its obligations under
this Plan, provided that the funds are set aside in a manner that does not
result in immediate taxation to Participants;
(d) To establish investment policy guidelines applicable to funds (if any)
set aside under (c);
<page>
(e) To establish one or more grantor trusts (as defined in Code Section 671
et seq.) to facilitate the payment of benefits under the Plan;
(f) To take any such other actions as it deems advisable to carry out the
purposes of the Plan; and
(g) To delegate its authority to any officer, employee, committee or agent
of the Company, as it deems advisable for the effective administration of the
Plan.
8.3 Administrative Committee.
(a) Role of Administrative Committee. The Company has appointed the
Administrative Committee to act as Plan Administrator. All actions taken by
the Administrative Committee, or by its delegate, as Plan Administrator will
be conclusive and binding on all persons having any interest under the Plan,
subject only to the provisions of Article IX. All findings, decisions and
determinations of any kind made by the Administrative Committee or its
delegate shall not be disturbed unless the Administrative Committee has acted
in an arbitrary and capricious manner.
(b) Powers and Authority. The Administrative Committee has the following
powers and authority under the Plan:
(1) In the exercise of its sole, absolute, and exclusive discretion, to
construe and interpret the terms and provisions of the Plan, to remedy and
resolve ambiguities, to grant or deny any and all non-routine claims for
benefits and to determine all issues relating to eligibility for benefits;
(2) To authorize withdrawals due to unforeseeable financial emergency;
(3) To amend the Plan for legal, technical, administrative, or compliance
purposes, as recommended by legal counsel;
(4) To retain and pay service providers whose services the Administrative
Committee deems necessary to effective administration of the Plan;
(5) To implement, in the manner it deems appropriate, the investment policy
guidelines established by the Compensation Committee; and
(6) To delegate its authority to any officer, employee, committee or agent
of the Company, as it deems advisable for the effective administration of the
Plan, any such delegation to carry with it the full discretion and authority
vested in the Administrative Committee.
(c) Exercise of Authority. All resolutions or other actions taken by the
Administrative Committee shall be either: (1) by vote of a majority of those
present at a meeting at which a majority of the members are present; or (2)
in writing by a majority of all the members at the time in office if they
act without a meeting.
8.4 Powers and Authority of Leadership Benefits. Leadership Benefits has
the following powers and authority under the Plan:
(a) To carry out day-to-day administration of the Plan, including notifying
Eligible Employees of the provisions of the Plan, approving and processing
<page>
Deferral Agreements, providing Participants with statements of Account,
approving and processing changes in the time and/or form of distributions,
and forwarding non-routine distribution requests to the Administrative
Committee;
(b) To prepare forms necessary for the administration of the Plan, including
Deferral Agreements, beneficiary designation forms, investment designation
forms, and any other form or document deemed necessary to the effective
administration of the Plan;
(c) To approve and adopt communications to be furnished to Eligible
Employees explaining the material provisions, terms, and conditions of the
Plan;
(d) To process routine distributions and to process non-routine
distributions that have been approved by the Administrative Committee;
(e) To negotiate and document agreements with Plan service providers,
subject to final approval by the Administrative Committee;
(f) To implement any policies or procedures approved by the Company or the
Administrative Committee;
(g) To recommend amendments to the Plan for adoption by the Company or the
Administrative Committee;
(h) To work with Plan service providers to ensure the effective
administration of the Plan; and
(i) To perform any and all tasks, duties, and responsibilities delegated by
the Company or the Administrative Committee.
8.5 Reliance on Opinions. Each person or entity authorized to act under
this 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.
8.6 Information. The Company shall supply full and timely information 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 may be necessary for the effective
administration of the Plan.
8.7 Indemnification. The Company shall indemnify and hold harmless each
Administrative Committee or Board member, and each Company employee
performing services or acting in any capacity with respect to the Plan, from
and 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. However,
the right to indemnification does not apply where an expense or liability is
incurred due to an individual's fraudulent or intentionally dishonest acts.
<page>
ARTICLE IX
CLAIMS PROCEDURE
9.1 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 Leadership Benefits. If the claim
cannot be processed as a routine payment of benefits, Leadership Benefits
will forward the claim to the Administrative Committee for review.
9.2 Denial of Claim. If a claim for payment of benefits is denied in full
or in part, the Administrative Committee or its delegate shall provide a
written notice to the Claiming Party within ninety days after receipt of the
claim 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 Administrative Committee or its delegate does not take any action
within the aforesaid ninety day period.
9.3 Review of Denied Claim. If the Claiming Party desires Administrative
Committee review of a denied claim, the Claiming Party shall notify the
Administrative Committee or its delegate in writing within sixty 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
pertinent documents, may submit any written issues and comments, and may
request an extension of time for such written submission of issues and
comments.
9.4 Decision upon Review of Denied Claim. The decision on the review of the
denied claim shall be rendered by the Administrative Committee within sixty
days after receipt of the request for review. The Administrative Committee
may extend this period for up to sixty additional days with advance notice to
the Claiming Party, an explanation of why the extension is necessary, and an
estimated date of 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 X
AMENDMENT AND TERMINATION
The Plan may be amended or terminated at any time for any reason. Such
amendment or termination may modify or eliminate any benefit hereunder,
provided that no such amendment or termination shall in any way reduce the
vested portion of the affected Participants' or Beneficiaries' Accounts. To
be effective, an amendment must be in writing and must be signed by a person
who has amendment authority under the terms of the Plan. Oral amendments or
modifications to the Plan, and any written amendments that are not signed by
an authorized person, are not valid or binding on the Company or any other
person. Upon termination of the Plan, the Board of Directors may elect to
accelerate distribution of Participant Accounts, but only if the accelerated
distribution would not result in additional tax to the Participant under Code
Section 409A.
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ARTICLE XI
MISCELLANEOUS
11.1 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
employee. Nothing in this Plan shall be deemed to give an Eligible Employee
the right to be retained in the service of the Company, its subsidiaries or
affiliates or to interfere with any right of the Company, its subsidiaries or
affiliates to discipline or discharge the Eligible Employee at any time.
11.2 Employee Cooperation. As a condition to participation in the Plan, an
Eligible Employee must cooperate with the Company by furnishing any and all
information reasonably requested by any of the Company, its subsidiaries or
affiliates, and take such other actions as may be requested to facilitate
Plan administration and the payment of benefits hereunder.
11.3 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.
11.4 Required Notice. Any notice which shall be or may be given under the
Plan or a Deferral Agreement shall be in writing and shall be mailed by
United States mail, postage prepaid, or in such other manner as the Company
determines is appropriate. If notice is to be given to the Company, such
notice shall be addressed to the Company c/o Leadership Benefits Department,
at 1700 Seventh Avenue, Suite 900, Seattle Washington 98101-4407. The appeal
from a denied claim must be in writing and sent physically by mail or courier
to Leadership Benefits. If notice is to be given to a Participant, such
notice shall be addressed to the last known address, either geographic or
electronic, in the Company's Human Resources records. Any notice or filing
required or permitted to be given to a Participant under this Plan shall be
sufficient if in writing and hand-delivered, or sent by mail (either physical
or electronic), to the last known address of the Participant. Any party may,
from time to time, change the address to which notices shall be mailed by
giving written notice of such new address.
11.5 Interest of Participant's Spouse. The interest in the benefits
hereunder of a spouse of a Participant who has predeceased the Participant
shall automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's will,
nor shall such interest pass under the laws of intestate succession.
11.6 Tax Liabilities from Plan. If all or any portion of a Participant's
benefit under this Plan generates a tax liability to the Participant,
including a liability under Code Section 409A, prior to the time that the
Participant is entitled to a distribution from the Plan, the Administrative
Committee may, in its discretion, instruct the Company to distribute
immediately available funds to the Participant in an amount necessary to
satisfy such tax liability.
11.7 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,
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modify or amend any other such plan or program except as may otherwise be
expressly provided.
11.8 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 Administrative Committee from all further
obligations under this Plan with respect to a Participant, and that
Participant's Deferral Agreement shall terminate upon such full payment of
benefits.
11.9 Costs of Enforcement. If any action at law or in equity is necessary
by the Administrative Committee or the Company to enforce the terms of the
Plan, the Administrative 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.
11.10 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.
11.11 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.
11.12 Applicable Law. To the extent not preempted by federal law, the Plan
shall be governed by the laws of the State of Washington.
11.13 Counterparts. This instrument and any Deferral Agreement may be
executed in one or more counterparts, each of which is legally binding and
enforceable.
11.14 Additional Definitions:
(a) "Board" means the Board of Directors of Nordstrom, Inc.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) The "Plan Year" means the calendar year.
IN WITNESS WHEREOF, this instrument setting forth the terms and conditions of
this amendment and restatement to the NORDSTROM EXECUTIVE DEFERRED
COMPENSATION PLAN is executed this 15th day of November, 2007, effective for
compensation deferred and vested on and after January 1, 2008, except as
otherwise provided herein.
NORDSTROM, INC.
By: /s/ Delena Sunday
Title: Executive Vice President -
Human Resources and Diversity
Affairs