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EXHIBIT 10.44
Nordstrom, Inc.
2004 Equity Incentive Plan
(2007 Amendment)
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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.................................................................2
4.2 Incentive Stock Options................................................2
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.....................3
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..........................................................4
7.2 Number of Shares.......................................................4
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.............................................5
8.1 Unrestricted Stock.....................................................5
8.2 Payment for Awards.....................................................5
ARTICLE 9. RESTRICTED SHARES...............................................6
9.1 Restricted Stock Agreement.............................................6
9.2 Payment for Awards.....................................................6
9.3 Vesting Conditions.....................................................6
9.4 Voting and Dividend Rights.............................................7
ARTICLE 10. PERFORMANCE SHARE UNITS........................................7
10.1 Performance Share Units...............................................7
10.2 Agreement.............................................................7
10.3 Payment for Awards....................................................7
10.4 Vesting Conditions....................................................7
10.5 Voting and Dividend Rights............................................8
10.6 Form and Time of Settlement of Units..................................9
10.7 Creditors' Rights.....................................................9
ARTICLE 11. PROTECTION AGAINST DILUTION....................................9
11.1 Adjustments...........................................................9
11.2 Dissolution or Liquidation...........................................10
ARTICLE 12. AWARDS UNDER OTHER PLANS......................................10
ARTICLE 13. LIMITATION ON RIGHTS..........................................10
13.1 Retention Rights.....................................................10
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13.2 Shareholders' Rights.................................................10
13.3 Regulatory Requirements..............................................10
13.4 Compliance with Code Section 409A....................................10
ARTICLE 14. WITHHOLDING TAXES.............................................11
14.1 General..............................................................11
14.2 Share Withholding....................................................11
ARTICLE 15. FUTURE OF THE PLAN............................................11
15.1 Term of the Plan.....................................................11
15.2 Amendment or Termination.............................................11
ARTICLE 16. DEFINITIONS....................................................11
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Nordstrom, Inc.
2004 Equity Incentive Plan
(2007 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 and Performance Share
Units.
The Plan was originally approved by the Board and the Shareholders of the
Company in 2004, and the Plan is hereby 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.
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 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 or Performance Share Units awarded
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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 11.
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 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 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 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 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 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 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
4.1 Grants. Employees and Non-Employee Directors shall be eligible for the
grant of NSOs, SARs, Unrestricted Shares, Restricted Shares, 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
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.
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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 11. 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 11.
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 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. 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 11.1.
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
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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 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
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 11. 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 11.
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 11.1.
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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.
ARTICLE 8. UNRESTRICTED SHARES
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 11.
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
9.1 Restricted Stock Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Stock 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 Stock
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 Stock 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 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 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
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increase or quantitative level in the Company's shareholder return as
compared to the S&P Retail Store Composite or other 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.
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 11.
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 Stock 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 Stock Agreement, and may have the same voting, dividend
and other rights as the Company's other shareholders. A Restricted Stock
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. PERFORMANCE SHARE UNITS
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10.1 Performance Share Units. Performance Share Units are designated in
shares of Common Stock.
10.2 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.
10.3 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.
10.4 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 the S&P Retail Store Composite or
other 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 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 11.
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
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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 11.1.
10.5 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.
10.6 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
(Unrestricted Shares or Restricted Shares) or (c) any combination of both, as
determined by the Committee. Methods of converting Performance Share 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
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 11.
10.7 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 11. PROTECTION AGAINST DILUTION
11.1 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;
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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.
11.2 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 12. 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 13. LIMITATION ON RIGHTS
13.1 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).
13.2 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
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made for cash dividends or other rights for which the record date is prior to
such time, except as expressly provided in the Plan.
13.3 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.
13.4 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
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 14. WITHHOLDING TAXES
14.1 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.
14.2 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.
ARTICLE 15. FUTURE OF THE PLAN
15.1 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 15.2.
15.2 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
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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 16. DEFINITIONS
16.1 "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.
16.2 "Board" means the Company's Board of Directors, as constituted from
time to time.
16.3 "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 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.
16.4 "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
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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.
16.5 "Code" means the Internal Revenue Code of 1986, as amended.
16.6 "Committee" means the Compensation Committee of the Company's Board.
16.7 "Company" means Nordstrom, Inc., a Washington corporation.
16.8 "Employee" means a common-law employee of the Company or a Subsidiary.
16.9 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
16.10 "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.
16.11 "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.
16.12 "ISO" means an incentive stock option described in Section 422(b) of
the Code.
16.13 "NSO" means a stock option not described in Sections 422 or 423 of the
Code.
16.14 "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.
16.15 "Option" means an NSO or an ISO granted under the Plan and entitling
the holder to purchase shares of Common Stock.
16.16 "Optionee" means an individual or estate who holds an Option.
16.17 "Participant" means an individual or estate who holds an Award.
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16.18 "Performance Share Unit" means a bookkeeping entry representing the
equivalent of one share of Common Stock, as awarded under the Plan.
16.19 "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.
16.20 "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.
16.21 "Restricted Share" means a share of Common Stock awarded under the
Plan, with such restrictions as set forth in the applicable Restricted Stock
Agreement.
16.22 "Restricted Stock 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.
16.23 "SAR" means a stock appreciation right granted under the Plan.
16.24 "SAR Agreement" means the agreement between the Company and a
Participant that contains the terms, conditions and restrictions pertaining
to his or her SAR.
16.25 "Service" means service as an Employee or Non-Employee Director.
16.26 "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.
16.27 "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.
16.28 "Unrestricted Share" means a share of Common Stock awarded under the
Plan.