<PAGE>
NORDSTROM
1501 Fifth Avenue, Seattle, WA 98101-1603
March 31, 1995
DEAR SHAREHOLDERS:
On behalf of the Board of Directors and management, we cordially invite you to
attend the Annual Meeting of Shareholders on Tuesday, May 16, 1995, at 11:00
a.m., Pacific Time, in the Grand Ballroom, Sheraton Seattle Hotel & Towers, 1400
Sixth Avenue, Seattle, Washington.
In addition to the matters described in the Notice of Annual Meeting and Proxy
Statement, there will be a report on the progress of the Company and an
opportunity to ask questions of general interest to you as a Shareholder.
YOUR VOTE IS VERY IMPORTANT. Therefore, whether or not you plan to attend the
meeting in person, please sign and return the enclosed Proxy in the envelope
provided. If you attend the meeting and desire to vote in person, you may do so
even though you have previously sent your Proxy.
We hope you will be able to join us and we look forward to seeing you in
Seattle.
Sincerely yours,
<TABLE>
<S> <C> <C> <C>
John A. McMillan Bruce A. Nordstrom James F. Nordstrom John N. Nordstrom
Co-Chairman Co-Chairman Co-Chairman Co-Chairman
</TABLE>
<PAGE>
NORDSTROM, INC.
1501 FIFTH AVENUE
SEATTLE, WA
98101-1603
NOTICE OF ANNUAL
MEETING OF
SHAREHOLDERS
To the Shareholders of
Nordstrom, Inc. :
The Annual Meeting of Shareholders of Nordstrom, Inc. will
be held on Tuesday, May 16, 1995, at 11:00 a.m., Pacific
Time, in the Grand Ballroom, Sheraton Seattle Hotel &
Towers, 1400 Sixth Avenue, Seattle, Washington for the
following purposes:
1. To elect twelve directors to hold office until the
next Annual Meeting of Shareholders and until their
successors are duly elected and qualified;
2. To ratify the appointment of auditors; and
3. To transact such other business as may properly come
before the meeting and any adjournment thereof.
Holders of shares of Common Stock of record at the close
of business on March 21, 1995 are entitled to notice of,
and to vote at, the meeting.
Shareholders are cordially invited to attend the meeting
in person.
By order of the Board of Directors,
KAREN E. PURPUR
Secretary
Seattle, Washington
March 31, 1995
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING,
YOU ARE URGED TO SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
1
<PAGE>
PROXY STATEMENT
APPROXIMATE
MAILING DATE:
MARCH 31, 1995
This Proxy Statement is furnished to the Shareholders of
Nordstrom, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors for use
at the Annual Meeting of Shareholders to be held on May
16, 1995 and any adjournment thereof. If the enclosed
Proxy is executed and returned, it will be voted in
accordance with the instructions given, but may be revoked
at any time insofar as it has not been exercised by
notifying the Secretary of the Company in writing (such
notification to be directed to the Company's offices at
1501 Fifth Ave., Seattle, WA 98101-1603). Each Proxy will
be voted for Proposals 1 and 2 if no contrary instruction
is indicated in the Proxy.
There were 82,251,665 shares of Common Stock, the only
security of the Company entitled to vote at the meeting,
outstanding at March 21, 1995, the record date for the
Annual Meeting of Shareholders. Shareholders are entitled
to one vote for each share of Common Stock held of record
at the close of business on March 21, 1995. Under
Washington law and the Company's Articles of
Incorporation, a quorum consisting of a majority of the
shares eligible to vote must be represented in person or
by proxy to elect directors and to transact any other
business that may properly come before the meeting. For
election of directors, the nominees elected will be those
receiving the greatest number of votes cast by the shares
entitled to vote, up to the number of directors to be
elected. Any action other than a vote for a nominee will
have the effect of voting against the nominee. Any other
matter will be approved if the votes cast in favor of the
matter exceed the votes cast against it. Abstentions and
broker non-votes will have no effect since such actions do
not represent votes cast by Shareholders.
PRINCIPAL
SHAREHOLDERS
As of March 21, 1995, members of the Nordstrom family were
the beneficial owners of approximately 30,353,798 shares
(36.40%) of the Company's Common Stock. D. Wayne Gittinger
and Bruce A. Nordstrom are the only ones who, to
management's knowledge, are the beneficial owners of more
than five percent of the Company's Common Stock at March
21, 1995.
2
<PAGE>
The following table sets forth information regarding
security ownership of certain beneficial owners, the
directors, certain executive officers and directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Amount and
Nature of
Beneficial Percent of
Name of Beneficial Owner Ownership Class
--------------------------------------------------------------------------------
<S> <C> <C>
PHILIP M. CONDIT 228 *
D. WAYNE GITTINGER 5,275,613(a)(b) 6.33%
1420 Fifth Avenue, Suite 4100
Seattle, Washington 98101
JOHN F. HARRIGAN 10,587(c) *
CHARLES A. LYNCH 3,587(d) *
ANN D. MCLAUGHLIN 1,587 *
JOHN A. MCMILLAN 1,320,989(a)(e) 1.58%
BRUCE A. NORDSTROM 5,493,004(a)(f) 6.59%
1501 Fifth Avenue
Seattle, Washington 98101
JAMES F. NORDSTROM 3,077,430(a)(g) 3.69%
JOHN N. NORDSTROM 3,492,754(a)(h) 4.19%
ALFRED E. OSBORNE, JR. 1,687(i) *
WILLIAM D. RUCKELSHAUS 6,587 *
ELIZABETH CROWNHART VAUGHAN 2,040 *
JOHN A. GOESLING 71,969(j) *
RAYMOND A. JOHNSON 90,071(k) *
JOHN J. WHITACRE 20,015(l) *
Directors and executive officers as a
group
(24 persons) 19,885,483 23.85%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<FN>
* Does not exceed 1% of the Company's outstanding Common Stock.
(a) Does not include 80,000 shares held by a corporation in which the director
or his spouse owns a one-eighth beneficial interest.
(b) Includes 3,499,154 held by his wife individually, 388,800 shares held by a
trust of which she is a trustee and beneficiary, and 1,375,380 shares held by a
trust of which she is the beneficiary. Does not include 103,448 shares held by
trusts of which he is a trustee.
(c) Includes 10,000 shares held by a family trust of which he is a trustee and
beneficiary.
(d) Includes 3,000 shares held by a family trust of which he is a trustee and
beneficiary.
(e) Includes 46,313 shares which may be acquired under the 1977 and 1987 Stock
Option Plans, 1,102,988 shares held by his wife individually and 54,000 shares
held by a trust of which his wife is the beneficiary.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(f) Includes 4,429 shares which may be acquired under the 1987 Stock Option
Plan, 14,194 shares held by his wife individually and 2,117,640 shares held by
trusts of which he is a trustee and beneficiary. Does not include 1,752,782
shares held by trusts of which he is co-trustee.
(g) Includes 20,259 shares which may be acquired under the 1987 Stock Option
Plan and 50,786 shares held by his wife.
(h) Includes 39,468 shares which may be acquired under the 1977 and 1987 Stock
Option Plans and 380,286 shares held by his wife.
(i) Includes 300 shares held by his wife and 200 shares held by a corporation
of which he is the sole shareholder.
(j) Includes 32,175 shares which may be acquired under the 1977 and 1987 Stock
Option Plans.
(k) Includes 32,573 shares which may be acquired under the 1977 and 1987 Stock
Option Plans.
(l) Includes 18,015 shares which may be acquired under the 1987 Stock Option
Plan.
</TABLE>
The directors and executive officers shown in the table disclaim any beneficial
interest in all shares held solely as custodian or trustee, and all shares held
by their spouses and immediate family members.
PROPOSAL 1:
ELECTION OF
DIRECTORS
Twelve directors will be elected at the meeting, each to
hold office until the next Annual Meeting of Shareholders
and until a successor has been duly elected and qualified.
Unless otherwise instructed by the Shareholder, the
persons named in the enclosed Proxy intend to vote for the
election of the persons listed in this Proxy Statement.
All of the nominees are currently directors of the
Company. If any nominee becomes unavailable for any reason
or should a vacancy occur before the election (which
events are not anticipated), the Proxy may be voted for a
person to be selected by the Board of Directors of the
Company. The nominees elected are those receiving the
greatest number of votes cast by the shares entitled to
vote, up to the number of directors to be elected.
4
<PAGE>
NOMINEES
Information related to the director nominees is set forth
below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
-------------------------------------------------------------------------------
<S> <C> <C>
PHILIP M. CONDIT President of The Boeing Company, a 1994
Age 53(a) Washington based aerospace product
manufacturer (formerly Executive Vice
President of Boeing Commercial Airplane
Group)
D. WAYNE GITTINGER Partner in the law firm of Lane Powell 1971
Age 62(b)(c) Spears Lubersky
JOHN F. HARRIGAN Retired (formerly Chairman of Union Bank) 1975
Age 69
CHARLES A. LYNCH Chairman of Market Value Partners Company, 1985
Age 67(d) a California based investment and
management firm
ANN D. MCLAUGHLIN President of the Federal City Council, a 1992
Age 53(e) Washington D.C. based non-profit,
non-partisan organization dedicated to
improving the nation's capital, and Vice
Chairman of the Aspen Institute, a
Colorado based non-profit, non-partisan
organization whose goal is to enhance,
through debate, the effectiveness of the
leaders of the country's democratic
institutions (formerly President and CEO
of New American Schools Development
Corporation; Visiting Fellow of The
Urban Institute)
JOHN A. MCMILLAN Co-Chairman of the Board of Directors 1966
Age 63(c)(f)(g) (formerly President)
BRUCE A. NORDSTROM Co-Chairman of the Board of Directors 1966
Age 61(c)(f)
JAMES F. NORDSTROM Co-Chairman of the Board of Directors 1966
Age 55(c)(f)
JOHN N. NORDSTROM Co-Chairman of the Board of Directors 1966
Age 57(c)(f)
ALFRED E. OSBORNE, JR. Director of the Entrepreneurial Studies 1987
Age 50(h) Center and Associate Professor of
Business Economics of The John E.
Anderson Graduate School of Management
at UCLA
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
-------------------------------------------------------------------------------
<S> <C> <C>
WILLIAM D. RUCKELSHAUS Chairman of the Board and Chief Executive 1985
Age 62(i) Officer of Browning-Ferris Industries,
Inc., a Texas based waste services
company
ELIZABETH CROWNHART President of Salar Enterprises, Ltd., an 1977
VAUGHAN Oregon based company engaged in the
Age 66(j) production of historical materials
(formerly Historian; Executive Director
of The North Pacific Studies Center of
the Oregon Historical Society)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<FN>
(a) Mr. Condit is also a director of The Boeing Company and Fluke Corporation.
(b) Mr. Gittinger is a partner in the law firm of Lane Powell Spears Lubersky,
which rendered legal services to the Company during the past fiscal year.
(c) Bruce A. Nordstrom is the brother-in-law of D. Wayne Gittinger and the
cousin of James F. Nordstrom and John N. Nordstrom, who are brothers. John A.
McMillan is a cousin of all four by marriage.
(d) Mr. Lynch is also a director of Fresh Choice, Inc., Pacific Mutual Life
Insurance Company and PST Vans, Inc.
(e) Mrs. McLaughlin, a former U.S. Secretary of Labor, is also a director of AMR
Corporation, Federal National Mortgage Association (Fannie Mae), General Motors
Corporation, Host Marriott Corporation, Kellogg Company, Potomac Electric Power
Company, Union Camp Corporation and Vulcan Materials Company.
(f) Mr. McMillan and Messrs. Bruce A., James F. and John N. Nordstrom are also
directors of Nordstrom Credit, Inc., the Company's wholly-owned finance
subsidiary.
(g) Mr. McMillan is also a director of Fleming Companies, Inc.
(h) Dr. Osborne is also a director of First Interstate Bank of California, N.A.,
Greyhound Lines, Inc., ReadiCare Inc., Seda Specialty Packaging Corporation, The
Times Mirror Company and United States Filter Corporation, and an independent
general partner of Technology Funding Venture Partners V.
(i) Mr. Ruckelshaus is also a director of Browning-Ferris Industries, Inc.,
Cummins Engine Company, Monsanto Company, Texas Commerce Bancshares and
Weyerhaeuser Company. He was also a director of the Company from 1978 to 1983.
(j) Mrs. Vaughan is also a director of First Interstate Bank of Oregon, N.A.,
First Interstate Bank of Washington, N.A. and First Interstate Bank of Idaho,
N.A.
</TABLE>
The Board of Directors recommends a vote for each of the nominees listed in the
table.
6
<PAGE>
BOARD OF DIRECTORS
AND COMMITTEES
The Board of Directors maintains an Audit Committee, a
Compensation and Stock Option Committee and an
Organization and Nominating Committee. These committees do
not have formal meeting schedules, but are required to
meet at least once each year. During the past year, there
were four meetings of the Board of Directors, four
meetings of the Audit Committee, five meetings of the
Compensation and Stock Option Committee and four meetings
of the Organization and Nominating Committee.
Current members of the Audit Committee are William D.
Ruckelshaus, Chair, Philip M. Condit, John F. Harrigan,
Charles A. Lynch, Ann D. McLaughlin, Alfred E. Osborne,
Jr. and Elizabeth Crownhart Vaughan. The Audit Committee
is responsible for recommending the Company's independent
auditors, and reviewing the scope, costs and results of
the audit engagement.
Current members of the Compensation and Stock Option
Committee are Elizabeth Crownhart Vaughan, Chair, D. Wayne
Gittinger, John F. Harrigan, Ann D. McLaughlin, Alfred E.
Osborne, Jr. and William D. Ruckelshaus. The Compensation
and Stock Option Committee is responsible for determining
the overall compensation levels of certain of the
Company's executive officers and administering the
Company's stock option plans.
Current members of the Organization and Nominating
Committee are Malcolm T. Stamper, Chair, D. Wayne
Gittinger, Charles A. Lynch and Elizabeth Crownhart
Vaughan. The Organization and Nominating Committee is
primarily responsible for recommending director nominees
to the Company's Board of Directors. The Organization and
Nominating Committee will consider recommendations by
Shareholders for vacancies on the Board. Suggestions may
be submitted to the Secretary of the Company.
TRANSACTIONS WITH
MANAGEMENT
During the year ended January 31, 1995, the Company
chartered an airplane from JFN, Inc., the sole shareholder
of which is James F. Nordstrom. For the period, the net
amount of payments made by the Company was $367,075. The
Company believes the charter rate and terms of this
arrangement are more favorable than those generally
available to the Company from other commercial charters.
7
<PAGE>
COMPENSATION OF
EXECUTIVE OFFICERS IN
THE YEAR ENDED
JANUARY 31, 1995
SUMMARY COMPENSATION TABLE
The following table shows all the cash compensation paid
or to be paid by the Company or any of its subsidiaries,
as well as certain other compensation paid or accrued,
during the fiscal year ended January 31, 1995, to the Co-
Presidents, the Executive Vice President who acts as the
Chief Financial Officer and the Co-Chairmen for the
periods indicated in all capacities in which they served:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
-----------------------------------------------------------------------------------------------------------------------------
Number
Fiscal Other Annual of Stock All Other
Name and Principal Position Year(1) Salary Bonus Compensation(2) Options Compensation(3)
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 1994 $315,000 $315,000 $658 4,495 $11,432
CO-PRESIDENT 1993 $300,000 $0 $467 6,279 $13,150
1992 $300,000 $30,000 $636 5,585 $14,148
-----------------------------------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 1994 $315,000 $315,000 $759 4,495 $12,830
CO-PRESIDENT 1993 $300,000 $0 $436 6,279 $15,261
1992 $300,000 $30,000 $145 5,585 $22,062
-----------------------------------------------------------------------------------------------------------------------------
JOHN A. GOESLING 1994 $307,500 $307,500 $754 4,388 $13,109
EXECUTIVE VICE PRESIDENT 1993 $295,000 $0 $405 6,173 $15,493
AND TREASURER 1992 $295,000 $29,500 $389 5,200 $15,661
-----------------------------------------------------------------------------------------------------------------------------
JOHN A. MCMILLAN 1994 $290,000 $290,000 $1,232 4,138 $15,584
CO-CHAIRMAN 1993 $290,000 $0 $1,650 6,069 $15,947
1992 $290,000 $29,000 $661 5,778 $18,255
-----------------------------------------------------------------------------------------------------------------------------
BRUCE A. NORDSTROM 1994 $290,000 $290,000 $594 4,138 $13,178
CO-CHAIRMAN 1993 $290,000 $0 $496 6,069 $13,417
1992 $290,000 $29,000 $1,168 5,778 $15,258
-----------------------------------------------------------------------------------------------------------------------------
JAMES F. NORDSTROM 1994 $290,000 $290,000 $732 4,138 $11,963
CO-CHAIRMAN 1993 $290,000 $0 $562 6,069 $13,151
1992 $290,000 $29,000 $976 5,778 $14,406
-----------------------------------------------------------------------------------------------------------------------------
JOHN N. NORDSTROM 1994 $290,000 $290,000 $429 4,138 $11,945
CO-CHAIRMAN 1993 $290,000 $0 $346 6,069 $13,055
1992 $290,000 $29,000 $1,360 5,778 $14,418
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The fiscal year of the Company ends January 31. Fiscal years indicated end
January 31 of the following year.
(2) Other Annual Compensation for fiscal year 1994 includes tax reimbursement
for medical expenses.
(3) All Other Compensation for fiscal year 1994 includes the following:
Company's Profit Sharing contribution: Raymond A. Johnson: $9,819; John J.
Whitacre: $9,774; John A. Goesling: $9,768; John A. McMillan: $9,897; Bruce
A. Nordstrom: $9,903; James F. Nordstrom: $9,871; and John N. Nordstrom:
$9,884.
401(k) Plan benefits: John J. Whitacre: $2,320; John A. Goesling: $2,058;
John A. McMillan: $2,322.
Premiums on excess life insurance: Raymond A. Johnson: $1,613; John J.
Whitacre: $736; John A. Goesling: $1,283; John A. McMillan: $3,275; Bruce
A. Nordstrom: $3,275; James F. Nordstrom: $2,092; John N. Nordstrom:
$2,061.
</TABLE>
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning
option grants during fiscal year 1994 to the named
executive officers:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Potential Realizable
Percent Value at Assumed
of Total Annual Rates of Stock
Options Price Appreciation for
Number Granted to Exercise or Option Terms
of Options Employees in Base Price ----------------------
Name Granted(1) Fiscal Year Per Share Expiration Date 5% 10%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 2,354 0.68% $43.875 May 17, 2004 $64,953 $164,605
2,141 0.62% $48.25 Nov 15, 2004 $64,967 $164,639
-------------------------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 2,354 0.68% $43.875 May 17, 2004 $64,953 $164,605
2,141 0.62% $48.25 Nov 15, 2004 $64,967 $164,639
-------------------------------------------------------------------------------------------------------------------
JOHN A. GOESLING 2,298 0.66% $43.875 May 17, 2004 $63,408 $160,689
2,090 0.60% $48.25 Nov 15, 2004 $63,419 $160,717
-------------------------------------------------------------------------------------------------------------------
JOHN A. MCMILLAN 2,167 0.63% $43.875 May 17, 2004 $59,793 $151,528
1,971 0.57% $48.25 Nov 15, 2004 $59,808 $151,566
-------------------------------------------------------------------------------------------------------------------
BRUCE A. NORDSTROM 2,167 0.63% $43.875 May 17, 2004 $59,793 $151,528
1,971 0.57% $48.25 Nov 15, 2004 $59,808 $151,566
-------------------------------------------------------------------------------------------------------------------
JAMES F. NORDSTROM 2,167 0.63% $43.875 May 17, 2004 $59,793 $151,528
1,971 0.57% $48.25 Nov 15, 2004 $59,808 $151,566
-------------------------------------------------------------------------------------------------------------------
JOHN N. NORDSTROM 2,167 0.63% $43.875 May 17, 2004 $59,793 $151,528
1,971 0.57% $48.25 Nov 15, 2004 $59,808 $151,566
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
<FN>
(1) Options are granted at the fair market value of the Company's Common Stock
on the date of grant. Absent contrary action by the Compensation and Stock
Option Committee at the time of grant, options vest and become exercisable
during employment with the Company ratably each year over a four-year period
from the date of grant. To the extent not already exercisable, options generally
become exercisable upon a sale of the Company or substantially all of its
assets. During the last fiscal year, the Company granted options to officers and
other key employees on May 17, 1994 and on November 15, 1994.
</TABLE>
9
<PAGE>
OPTION EXERCISES AND YEAR END VALUE TABLE
The following table sets forth information concerning
option exercises and the value of options held during
fiscal year 1994 by the named executive officers:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Dollar Value of
Number of Unexercised Unexercised, in-the-Money
Number of Options Held at Options held at
Shares Dollar January 31, 1995 January 31, 1995(1)
Acquired on Value -------------------------- --------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 6,483 $149,109 29,846 13,164 $331,953 $64,704
---------------------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 0 $0 15,288 13,164 $125,384 $64,704
---------------------------------------------------------------------------------------------------------------
JOHN A. GOESLING 0 $0 33,973 12,680 $419,610 $62,418
---------------------------------------------------------------------------------------------------------------
JOHN A. MCMILLAN 0 $0 43,589 12,853 $563,547 $64,214
---------------------------------------------------------------------------------------------------------------
BRUCE A. NORDSTROM 11,304 $77,167 4,874 12,853 $30,788 $64,214
---------------------------------------------------------------------------------------------------------------
JAMES F. NORDSTROM 0 $0 17,535 12,853 $128,361 $64,214
---------------------------------------------------------------------------------------------------------------
JOHN N. NORDSTROM 0 $0 36,744 12,853 $432,477 $64,214
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
<FN>
(1) Dollar value is based on the market value of the Company's Common Stock on
the date of exercise or at January 31, 1995, as the case may be, minus the
exercise price.
</TABLE>
PENSION PLAN TABLE
The following table sets forth information concerning
estimated annual benefits payable to each of the named
executive officers upon their retirement based upon
indicated years of service (without reduction for any
Profit Sharing Retirement Plan benefits):
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Years of Service(2)
Average Annual ------------------------------------------------------------
Compensation(1) 15 20 25 30 35
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
125,000 $ 45,000 $ 60,000 $ 75,000 $ 75,000 $ 75,000
150,000 $ 54,000 $ 72,000 $ 90,000 $ 90,000 $ 90,000
175,000 $ 63,000 $ 84,000 $105,000 $105,000 $105,000
200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
225,000 $ 81,000 $108,000 $135,000 $135,000 $135,000
250,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
300,000 $108,000 $144,000 $180,000 $180,000 $180,000
400,000 $144,000 $192,000 $240,000 $240,000 $240,000
450,000 $162,000 $216,000 $270,000 $270,000 $270,000
500,000 $180,000 $240,000 $300,000 $300,000 $300,000
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
<FN>
(1) The benefits are payable pursuant to the Nordstrom Supplemental Executive
Retirement Plan, which covers officers of the Company and its subsidiaries,
including the named executive officers. The benefits are unfunded and limited to
a maximum of 60% of the monthly average compensation (based solely on the yearly
amounts set forth in the salary and bonus columns of the Summary Compensation
Table) less any monthly benefits payable under the Nordstrom Profit Sharing
Retirement Plan. The
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
normal retirement benefit provided by the Nordstrom Supplemental Executive
Retirement Plan is 2.4% of the monthly average compensation for the three
highest paying years of the last five years, multiplied by the number of years
of service with the Company, up to a maximum of twenty-five years.
(2) The credited years of service to the Company for Raymond A. Johnson, John J.
Whitacre, John A. Goesling, John A. McMillan, Bruce A. Nordstrom, James F.
Nordstrom and John N. Nordstrom are 25, 18, 17, 37, 38, 33, and 35,
respectively.
</TABLE>
COMPENSATION AND
STOCK OPTION
COMMITTEE
REPORT ON FISCAL YEAR
1994 EXECUTIVE
COMPENSATION
The Compensation and Stock Option Committee is comprised
of six non-employee directors. The Committee is
responsible for setting compensation levels for the
Co-Chairmen, the Co-Presidents and the Executive Vice
Presidents of the Company. This Committee also consults
with the Co-Chairmen and the Co-Presidents with respect to
the compensation and benefits for other officers and with
respect to the benefits for certain other employees of the
Company.
COMPENSATION PHILOSOPHY
The Company bases different portions of its executive
compensation program on differing measures of Company
performance and Shareholder value. The Company believes
that focusing on performance measures based solely on
short-term changes in stock price or on performance
measures based solely on Company data, such as sales
increases or earnings per share, will not necessarily
increase long-term Shareholder value. As a result, the
Company's compensation program currently reflects the
following themes:
- A material portion of compensation should be
meaningfully related to Company performance.
- Medium and long-term Company performance and value
created for Shareholders should be measured by a mix
of factors, including increases in Company stock
price, sales increases, earnings per share and other
performance related factors.
- Since the Company has chosen teams to oversee the
operations of the Company, compensation
opportunities for the Co-Presidents, who manage the
Company's day-to-day activities, and the
Co-Chairmen, who oversee the overall operation of
the Company, should be based on the respective
team's effort and performance of the Company as a
whole.
- Compensation should play a critical role in
attracting and retaining executives whom the Company
deems most able to further its goals.
The Company also considers Section 162(m) of the Internal
Revenue Code, which limits to $1 million per year the
compensation expense deduction the Company may take with
respect to each of its executive officers, including those
named in the Summary Compensation Table. Considering the
current base salary levels of those officers, the Company
believes there is no risk of
11
<PAGE>
exceeding the $1 million amount for any such officer. The
Company intends to comply with regulations promulgated
under Section 162(m) to qualify both its Annual Bonus
Incentive and Stock Option Plans as performance-based
exceptions to the compensation expense deduction limit.
PAY MIX AND MEASUREMENT
The Company's executive compensation program is based on
three components, each of which furthers a differing
objective, but all of which together are intended to serve
the Company's overall compensation philosophy.
BASE SALARY. The Committee reviews the competitive median
base salaries for competitors in the specialty retailing
field, including companies listed in Standard & Poor's
Retail Store Composite referenced in the Performance Graph
on page 15. The executive structure of most of these
companies does not lend itself readily to direct
comparison with the Company and its practice of choosing
teams to manage the business of the Company. With
attendant shared responsibilities, the Company has chosen
to set base salary levels for individuals in these teams
at levels which are generally not as high as that of its
competitors with a single chief executive officer. Base
salary increases or decreases are established on an annual
basis and are based on this Committee's view of how the
management teams and the respective individuals contribute
to the overall performance of the Company. Overall
performance of the Company is measured by a number of
factors including the Company's earnings, its performance
in the real or perceived retail environment and
competitive conditions, performance versus budget, growth
in accounts receivable, improvement in gross margins and
this Committee's assessment of management skills. None of
these factors is given greater weight than any other
factor. This Committee's review of salary information for
competitors also enables it to observe what changes have
occurred, if any, in competitors' base salaries.
ANNUAL BONUS INCENTIVES. This incentive is intended to
reflect the Company's belief that management's
contribution to medium and long-term Company performance
comes, in part, from maximizing Company earnings per
share, division sales, inventory turn and gross margins.
Annual bonus incentives for the Co-Chairmen, the
Co-Presidents and the Executive Vice President who acts as
the Chief Financial Officer are based solely on specified
earnings per share target amounts. Annual bonus incentives
for the other Executive Vice Presidents are based on
various combinations of earnings per share, division
sales, inventory turn, gross margin and expense control
targets. The amount of the respective bonuses is based on
these targets which, in turn, relate to pre-established
percentages of the respective base salaries. Under this
plan, executive officers do not receive any bonus
incentives until the applicable minimum specified
performance target is achieved. Bonuses for fiscal year
1994 were paid both to those executive
12
<PAGE>
officers who were subject to specified earnings per share
targets and to those subject to various division sales,
inventory turn and gross margin targets. The performance
targets have not been waived for purposes of these bonus
incentives for any year covered by the Summary
Compensation Table.
LONG-TERM INCENTIVES. STOCK OPTIONS. The 1977 Nordstrom
Stock Option Plan expired on August 16, 1987. The 1977
Plan authorized granting options to key employees or key
managerial personnel of the Company and its subsidiaries.
A number of options granted under this Plan remain
outstanding. The 1987 Nordstrom Stock Option Plan, adopted
for a term of 10 years beginning August 16, 1987,
authorizes granting options to key employees or key
managerial personnel of the Company and its subsidiaries.
Both the 1977 and 1987 Stock Option Plans are administered
by the Committee.
Under the 1987 Plan, stock options may be granted to the
named executive officers and other key employees. The
option incentive component of the total compensation
package is intended to retain and motivate executives to
improve long-term stock market performance and to increase
Shareholder value. Stock options are granted at the fair
market value of the Company's Common Stock and will only
have value if the Company's stock price increases from the
time of the award. Vesting of options occurs during
employment with the Company upon each anniversary of the
award, with full vesting generally after the fourth year
following an award. Accordingly, executives must be
employed by the Company at the time of vesting in order to
benefit from the award. The number of stock options
granted to the named executive officers has been
determined by the Committee pursuant to a formula used for
all plan participants, without reference to the number of
stock options granted previously. Pursuant to the formula,
the number of option shares granted corresponds to the
number of underlying Company shares that would produce an
amount equal to 50% of the participant's yearly salary,
assuming an annual 12% growth rate in the Company's Common
Stock price over a five year period. Stock options have
been granted semi-annually in May and November, with one
half of the formula value of the option award granted each
time. Since the formula is keyed to salary, the
performance factors discussed in the Base Salary paragraph
also would apply to this compensation component. This
Committee reserves the right to change or eliminate the
formula at any time but has no present intention to do so.
RETIREMENT/SAVINGS. The Nordstrom Profit Sharing
Retirement Plan was established in 1951 and covers all
regular, full-time employees of the Company and its
subsidiaries, including the named executive officers.
Except for the 401(k) feature described below, the
Retirement Plan, which is qualified under Internal Revenue
Code Section 401(a), is funded solely by the Company. The
Board of Directors determines annually an amount to be
contributed by the Company to the Retirement Plan.
Allocation of the
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Company's contribution to each participant's account is
pro rata, based on one unit of credit for each year of
service and one unit of credit for each $100 of
compensation. For purposes of this latter calculation,
compensation is limited to $150,000 for calendar year
1994.
The 401(k) feature of the Retirement Plan allows an
employee to defer a portion of his or her compensation
under Section 401(k) of the Internal Revenue Code.
Eligibility for this feature occurs as of February 1
following or coinciding with the employee's date of hire.
Once eligible, the employee may elect to have the Company
pay from 1% to 10% of the employee's compensation, up to a
maximum of $9,240 for calendar year 1994, to the
Retirement Plan instead of paying that amount to the
employee. The Company matches 25% of the employee's
contribution up to 6% of the employee's compensation.
Monies in the account are invested at the direction of the
employee among one or more of six funds, one of which
consists of Common Stock of the Company. Distributions are
made at normal retirement or earlier termination of
employment, and for terminal illness, disability or
hardship.
COMPENSATION OF THE CO-PRESIDENTS
Base salaries for the two Co-Presidents are determined by
overall Company performance. Overall Company performance
is measured by a number of factors including the Company's
earnings, real or perceived retail environment and
competitive conditions, performance versus budget, growth
in accounts receivable, improvement in gross margins and
this Committee's assessment of management skills. None of
these factors is given greater weight than any other
factor. For fiscal year 1994, the base salaries of the Co-
Presidents were increased by five percent over their base
salaries of the previous year to reflect moderate growth
in overall Company performance. Previously, the base
salaries of the Co-Presidents had not been increased since
fiscal year 1992. During fiscal year 1994, the Company
experienced even greater improvement in a number of these
areas and this Committee considered that in setting base
salaries for the Co-Presidents for fiscal year 1995.
Annual bonus incentives for the Co-Presidents are based
solely on earnings per share targets as previously
described. Those earnings per share targets were met and
the Co-Presidents each received a bonus for fiscal year
1994 based on a corresponding pre-established percentage
of their base salary as previously described. The
Co-Presidents received stock options during fiscal year
1994 pursuant to the formula used for all Stock Option
Plan participants as previously described.
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<PAGE>
The Committee believes the Company has an appropriate mix
of incentives to attract high quality executive officers
and to reward them for continued, loyal service to the
Company.
COMPENSATION AND STOCK OPTION
COMMITTEE
Elizabeth Crownhart Vaughan, Chair
D. Wayne Gittinger
John F. Harrigan
Ann D. McLaughlin
Alfred E. Osborne, Jr.
William D. Ruckelshaus
STOCK PRICE
PERFORMANCE
PERFORMANCE GRAPH
The following graph compares for each of the last five
fiscal years ending January 31 the cumulative total return
of Company Common Stock, Standard & Poor's 500 Index and
Standard & Poor's Retail Store Composite. The cumulative
total return of Company Common Stock assumes $100 invested
on January 31, 1990 in Nordstrom, Inc. Common Stock and
assumes reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NORDSTROM, INC. COMMON STOCK STANDARD & POOR'S 500 INDEX STANDARD & POOR'S RETAIL STORES COMPOSITE
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 83.13 108.42 117.00
1992 112.68 133.00 164.00
1993 120.69 147.08 196.00
1994 108.49 165.96 189.00
1995 126.74 165.68 175.00
</TABLE>
15
<PAGE>
COMPENSATION OF
DIRECTORS
Employee directors of the Company are not paid any fees
for serving as members of the Board or any Board
committee. Non-employee directors are paid a yearly
retainer of $15,000 and a fee of $1,000 for each Board
meeting and $1,000 for each committee meeting attended,
together with reasonable traveling expenses. Pursuant to
the 1993 Non-Employee Director Stock Incentive Plan,
immediately following each Annual Meeting of Shareholders
non-employee directors also receive that number of shares
of Company Common Stock having a fair market value of
$10,000, plus a $4,000 cash award to offset tax
obligations attributable to the stock award.
COMPENSATION
COMMITTEE INTERLOCKS
AND INSIDER
PARTICIPATION
None of the members of the Compensation and Stock Option
Committee is or has been an officer or employee of the
Company or any of its subsidiaries. D. Wayne Gittinger, a
director of the Company and a member of the Compensation
and Stock Option Committee, is a partner in the law firm
of Lane Powell Spears Lubersky, which rendered legal
services to the Company during the past fiscal year.
PROPOSAL 2:
RATIFICATION OF
APPOINTMENT OF
AUDITORS
The Board of Directors, acting upon the recommendation of
the Audit Committee, has appointed the independent public
accounting firm of Deloitte & Touche LLP to be the
Company's auditors for fiscal year 1995. As in the past,
the Board has determined that it would be desirable to
request ratification of its appointment by the
Shareholders of the Company. If the Shareholders do not
ratify the appointment of Deloitte & Touche LLP, the
appointment of independent public accountants will be
reconsidered by the Board. A representative of Deloitte &
Touche LLP will be present at the Annual Meeting, will
have the opportunity to make a statement if he or she so
desires and will be available to respond to appropriate
questions. The affirmative vote of a majority of the votes
cast is required for the ratification of Deloitte & Touche
LLP as auditors.
The Board of Directors recommends ratification of Deloitte
& Touche LLP as auditors for the Company.
SOLICITATION OF
PROXIES All expenses of proxy solicitation will be paid by the
Company. Solicitation of proxies will be made primarily by
mail, but proxies may also be solicited personally, by
telephone and by telegraph and by regular officers and
employees of the Company who will receive no additional
compensation for their services. Brokers or other persons
holding shares in their names or in the names of nominees
will be reimbursed their reasonable expenses for sending
proxy material to principals and obtaining their proxies.
In addition, the Company has retained Corporate Investor
Communications, Inc. to aid in the Company's solicitation
for an estimated fee of $6,000 plus out-of-pocket
expenses.
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<PAGE>
COMPLIANCE WITH
SECTION 16(A)OF
THE EXCHANGE ACT
OF 1934
Based solely on its review of copies of reports made
pursuant to Section 16(a) of the Securities Exchange Act
of 1934 and the related regulations, the Company believes
that during fiscal year 1994 all filing requirements
applicable to its directors, executive officers and 10
percent shareholders were satisfied.
OTHER MATTERS
The Board of Directors of the Company knows of no other
matters that may come before the meeting. However, if any
other matters should properly come before the meeting or
any adjournment thereof, it is the intention of the
persons named in the Proxy to vote the Proxy in accordance
with their best judgment.
SHAREHOLDER
PROPOSALS FOR 1996
ANNUAL MEETING
Proposals for Shareholder action which eligible
Shareholders wish to have included in the Company's Proxy
Statement mailed to Shareholders in connection with the
Company's 1996 Annual Meeting must be received by the
Company at its principal executive offices on or before
December 1, 1995.
By order of the Board of Directors,
KAREN E. PURPUR
Secretary
Seattle, Washington
March 31, 1995
17
<PAGE>
NORDSTROM, INC. PROXY -- 1995 ANNUAL MEETING
1501 FIFTH AVENUE, SEATTLE, WA 98101-1603
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints D. Wayne Gittinger and Karen E. Purpur, or either of
them, with full power of substitution, proxies to vote all shares of stock of
the undersigned entitled to vote at the Annual Meeting of Shareholders of
Nordstrom, Inc. to be held May 16, 1995, in Seattle, Washington, at 11:00 a.m.,
Pacific Time, and any adjournment thereof, with all power the undersigned would
possess if personally present.
The Board of Directors recommends a vote "FOR":
1. ELECTION OF DIRECTORS / / FOR all nominees / / WITHHOLD AUTHORITY
(EXCEPT AS INDICATED TO VOTE FOR ALL
TO THE CONTRARY BELOW) NOMINEES
Nominees: P. M. Condit, D. W. Gittinger, J. F. Harrigan, C. A. Lynch, A. D.
McLaughlin, J. A. McMillan, B. A. Nordstrom, J. F. Nordstrom, J. N. Nordstrom,
A. E. Osborne, Jr., W. D. Ruckelshaus and E. C. Vaughan.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
--------------------------------------------------------------------------------
2. RATIFICATION OF APPOINTMENT OF AUDITORS
/ / FOR / / AGAINST / / ABSTAIN
3. Such other matters as may properly come before the meeting. The Board of
Directors at present knows of no other matters to be brought before the
meeting.
(Continued and to be signed on other side)
<PAGE>
This proxy will be voted in accordance with the instructions given. UNLESS
REVOKED OR OTHERWISE INSTRUCTED, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION
OF THE PROXIES UPON ALL OTHER MATTERS WHICH MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
DATED: _______________, 1995
____________________________
____________________________
Signature of Shareholder(s)
PLEASE SIGN AS YOUR NAME
APPEARS. Trustees,
Guardians, Personal and
other Representatives,
please indicate full titles.
PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
