<PAGE>
[NORDSTROM LOGO]
1501 Fifth Avenue, Seattle, WA 98101-1603
March 31, 1997
DEAR SHAREHOLDERS:
On behalf of the Board of Directors and management, I cordially invite you to
attend the Annual Meeting of Shareholders on Tuesday, May 20, 1997, at 11:00
a.m., Pacific Daylight 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.
I hope you will be able to join us and we look forward to seeing you in Seattle.
Sincerely yours,
[JOHN WHITACRE SIGNATURE]
John J. Whitacre
Chairman of the Board of Directors
<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 20, 1997, at 11:00 a.m., Pacific
Daylight Time, in the Grand Ballroom, Sheraton Seattle
Hotel & Towers, 1400 Sixth Avenue, Seattle, Washington for
the following purposes:
1. To elect 12 directors to hold office until the next
Annual Meeting of Shareholders and until their successors
are duly elected and qualified;
2. To consider and vote upon a proposal to approve the
Nordstrom, Inc. 1997 Stock Option Plan;
3. To ratify the appointment of auditors; and
4. 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 20, 1997 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 SIGNATURE]
Karen E. Purpur
Secretary
Seattle, Washington
March 31, 1997
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, 1997
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
20, 1997 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, 2 and 3 and may be voted on such
other matters as may properly come before the meeting if
no contrary instruction is indicated in the Proxy.
There were 78,557,335 shares of Common Stock, the only
security of the Company entitled to vote at the meeting,
outstanding at March 20, 1997, 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 20, 1997. 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. The
Nordstrom, Inc. 1997 Stock Option Plan will be approved
and the appointment of auditors will be ratified if the
votes cast in favor of the respective action exceed the
votes cast against it. Abstentions and nonvotes by brokers
will have no effect since such actions do not represent
votes cast by Shareholders.
2
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of March 20, 1997 the
number of shares of Common Stock held by each person known
to the Company to own beneficially more than five percent
of the outstanding shares of Common Stock, the directors
and nominees, the executive officers named in the Summary
Compensation Table on page 8, and all 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 680 *
D. WAYNE GITTINGER 5,254,583(a)(b) 6.59%
1420 Fifth Avenue, Suite 4100
Seattle, Washington 98101
ENRIQUE HERNANDEZ, JR. 0 *
RAYMOND A. JOHNSON 62,214 *
CHARLES A. LYNCH 4,039(c) *
ANN D. MCLAUGHLIN 2,039 *
JOHN A. MCMILLAN 1,212,046(a)(d) 1.52%
BRUCE A. NORDSTROM 5,480,449(a)(e) 6.88%
1501 Fifth Avenue
Seattle, Washington 98101
ELMER AND KATHARINE NORDSTROM FAMILY
INTERESTS, L.P. 6,238,276(f) 7.83%
c/o 1501 Fifth Avenue
Seattle, Washington 98101
JOHN N. NORDSTROM 2,037,972(a)(g) 2.56%
ALFRED E. OSBORNE, JR. 2,889(h) *
WILLIAM D. RUCKELSHAUS 7,039 *
ELIZABETH CROWNHART VAUGHAN 2,492 *
JOHN J. WHITACRE 33,462(i) *
JAMMIE BAUGH 21,384(j) *
GAIL A. COTTLE 19,396(k) *
JOHN A. GOESLING 79,317(l) *
JACK F. IRVING 52,543(m) *
Directors and executive officers as a
group
(23 persons) 17,941,911(n) 22.52%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* 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.
3
<PAGE>
(b) Includes 3,477,404 shares held by his wife individually, 268 shares held by
her as a participant in the Company's 401(k) Plan, 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 3,000 shares held by a family trust of which he is a trustee and
beneficiary.
(d) Includes 1,025,097 shares held by his wife individually and 54,000 shares
held by a trust of which his wife is the beneficiary.
(e) Includes 29,194 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
1,759,482 shares held by trusts of which he is co-trustee.
(f) The general partners of this partnership are Katharine J. Nordstrom, the
Elmer Nordstrom Trust (John N. Nordstrom, trustee), the James F. Nordstrom
Interests, L.P., and the John N. Nordstrom Interests, L.P. The general partners
of the James F. Nordstrom Interests, L.P. are Sally A. Nordstrom, the Estate of
James F. Nordstrom (Sally A. Nordstrom, personal representative), J. Daniel
Nordstrom and William E. Nordstrom, and the general partners of the John N.
Nordstrom Interests, L.P. are John N. Nordstrom, Sally B. Nordstrom and James A.
Nordstrom. Each of these entities and individuals are deemed to beneficially own
the shares held by the Elmer and Katharine Nordstrom Family Interests, L.P. Each
of the general partners disclaims beneficial ownership of the shares held by the
Elmer and Katharine Nordstrom Family Interests, L.P. that exceed the greater of
their proportionate interest in their respective partnership's profits or
capital account.
(g) Includes 80,805 shares held by his wife, 1,003 shares held by a trust of
which he is the trustee and 1,390,000 shares held by the John N. Nordstrom
Interests, L.P. of which he is a general partner. Mr. Nordstrom disclaims
beneficial ownership of the shares held by the John N. Nordstrom Interests, L.P.
that exceed the greater of his proportionate interest in the partnership's
profits or capital account. Does not include any of the shares held by the Elmer
and Katharine Nordstrom Family Interests, L.P.
(h) Includes 300 shares held by his wife and 200 shares held by a corporation of
which he is the sole shareholder.
(i) Includes 28,814 shares which may be acquired under the 1987 Stock Option
Plan and 2,648 shares held by him as a participant in the Company's 401(k) Plan.
(j) Includes 18,443 shares which may be acquired under the 1987 Stock Option
Plan and 1,889 shares held by her as a participant in the Company's 401(k) Plan.
(k) Represents shares which may be acquired under the 1987 Stock Option Plan.
(l) Includes 39,123 shares which may be acquired under the 1987 Stock Option
Plan.
(m) Includes 35,921 shares which may be acquired under the 1987 Stock Option
Plan.
(n) Includes the 6,238,276 shares held by the Elmer and Katharine Nordstrom
Family Interests, L.P.
The directors and executive officers shown in the table disclaim beneficial
interest in any 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.
Except for Mr. Hernandez, all of the nominees are
currently directors of the Company. If any nominee becomes
4
<PAGE>
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.
5
<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 Chairman and CEO of The Boeing Company, a 1994
Age 55(a) Washington based aerospace product
manufacturer (formerly President of the
Boeing Company; Executive Vice President
of Boeing Commercial Airplane Group)
D. WAYNE GITTINGER Partner in the law firm of Lane Powell 1971
Age 64(b)(c) Spears Lubersky LLP
ENRIQUE HERNANDEZ, JR. President and CEO of Inter-Con Security N/A
Age 41(d) Systems, Inc., a California based
worldwide security and facility support
services provider; co-founder and
principal partner, Interspan
Communications, a television
broadcasting company serving Spanish
speaking audiences
CHARLES A. LYNCH Chairman of Fresh Choice, Inc., a 1985
Age 69(e) California based restaurant chain
(formerly Chairman of Market Value
Partners Company)
ANN D. MCLAUGHLIN Chairman of the Aspen Institute, a 1992
Age 55(f) 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 Vice Chairman of
the Aspen Institute; President of the
Federal City Council; President and CEO
of New American Schools Development
Corporation; Visiting Fellow of the
Urban Institute)
JOHN A. MCMILLAN Retired (formerly Co-Chairman of the Board 1966
Age 65(c)(g) of Directors of the Company)
BRUCE A. NORDSTROM Retired (formerly Co-Chairman of the Board 1966
Age 63(c) of Directors of the Company)
JOHN N. NORDSTROM Retired (formerly Co-Chairman of the Board 1966
Age 59(c) of Directors of the Company)
ALFRED E. OSBORNE, JR. Director of the Harold Price Center for 1987
Age 52(h) Entrepreneurial Studies and Associate
Professor of Business Economics, The
Anderson School at UCLA
WILLIAM D. RUCKELSHAUS A Principal in Madrona Investment Group, 1985
Age 64(i) L.L.C., a Washington based private
investment firm (formerly Chairman and
CEO of Browning-Ferris Industries, Inc.)
ELIZABETH CROWNHART President of Salar Enterprises, Ltd., an 1977
VAUGHAN Oregon based Company engaged in the
Age 68 production of historical materials
JOHN J. WHITACRE Chairman of the Board of Directors of the 1995
Age 44(j) Company (formerly Co-Chairman of the
Board of Directors of the Company;
Co-President of the Company)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
(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
LLP, which rendered legal services to the Company during the past fiscal year.
(c) Bruce A. Nordstrom is a brother-in-law of D. Wayne Gittinger and a cousin of
John N. Nordstrom. John A. McMillan is a cousin of all three by marriage.
(d) Mr. Hernandez is also a director of California Healthcare Foundation, Great
Western Financial Corporation, ICSS Holding Corp. and McDonald's Corporation.
(e) Mr. Lynch is also a director of Fresh Choice, Inc., Pacific Mutual Life
Insurance Company, PST Vans, Inc. and SRI International.
(f) Mrs. McLaughlin, a former U.S. Secretary of Labor, is also a director of
AMR Corporation, Donna Karan International, Fannie Mae, General Motors
Corporation, Harman International Industries, Inc., Host Marriott Corporation,
Kellogg Company, Potomac Electric Power Company, Sedgwick Group plc, Union Camp
Corporation and Vulcan Materials Company.
(g) Mr. McMillan is also a director of Fleming Companies, Inc. and the Follett
Company.
(h) Dr. Osborne is also a director of Greyhound Lines, Inc., SEDA Specialty
Packaging Corporation, The Times Mirror Company and United States Filter
Corporation, and is also a trustee of the Sierra Trust Funds and an independent
general partner of Technology Funding Venture Partners V.
(i) Mr. Ruckelshaus is also a director of Browning-Ferris Industries, Inc.
(chairman of the board), Cummins Engine Company, Gargoyles, Inc., Monsanto
Company and Weyerhaeuser Company. The was also a director of the Company from
1978 to 1983.
(j) Mr. Whitacre is also a director of Nordstrom Credit, Inc., the Company's
wholly-owned finance subsidiary.
The Board of Directors recommends a vote for each of the nominees listed in the
table.
7
<PAGE>
BOARD OF DIRECTORS
AND COMMITTEES
The Board of Directors maintains an Audit Committee, a
Compensation and Stock Option Committee and a Committee on
Organization and Director Affairs. 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 Committee
on Organization and Director Affairs.
Current members of the Audit Committee are William D.
Ruckelshaus, Chair, Philip M. Condit, 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, 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 Committee on Organization and
Director Affairs are D. Wayne Gittinger, Chair, Charles A.
Lynch, Ann D. McLaughlin and Elizabeth Crownhart Vaughan.
The Committee is primarily responsible for recommending
director nominees to the Company's Board of Directors. The
Committee will consider recommendations by Shareholders
for vacancies on the Board. Suggestions may be submitted
to the Secretary of the Company.
7
<PAGE>
COMPENSATION OF
EXECUTIVE OFFICERS IN
THE YEAR ENDED
JANUARY 31, 1997
SUMMARY COMPENSATION TABLE
The following table summarizes compensation paid or
accrued by the Company for services rendered by the
Chairman, the former Co-Chairman and four Executive Vice
Presidents for the periods indicated:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
<CAPTION>
Annual Compensation Long-Term Compensation
- --------------------------------------------------------------------------------------------------
Number
Name and Principal Fiscal Other Annual of Stock All Other
Position Year(a) Salary Bonus Compensation(b) Options Compensation(c)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 1996 $350,000 $0 $49,503 2,233 $41,110
FORMER CO-CHAIRMAN 1995 $344,167 $0 $620 5,651 $11,397
1994 $315,000 $315,000 $658 4,495 $11,432
- --------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 1996 $350,000 $0 $20,769 5,024 $48,093
CHAIRMAN OF THE BOARD OF 1995 $344,167 $0 $1,648 5,651 $10,998
DIRECTORS 1994 $315,000 $315,000 $759 4,495 $12,830
- --------------------------------------------------------------------------------------------------
JAMMIE BAUGH 1996 $242,000 $0 $823 3,473 $9,947
1995 $239,667 $0 $207 3,907 $10,540
EXECUTIVE VICE PRESIDENT 1994 $225,883 $208,222 $341 3,253 $12,435
- --------------------------------------------------------------------------------------------------
GAIL A. COTTLE 1996 $216,667 $20,000 $59 3,221 $9,344
1995 $203,500 $20,000 $20,413 3,309 $46,407
EXECUTIVE VICE PRESIDENT 1994 $194,167 $221,000 $312 2,796 $12,463
- --------------------------------------------------------------------------------------------------
JOHN A. GOESLING 1996 $325,000 $0 $127 4,665 $11,055
EXECUTIVE VICE PRESIDENT 1995 $322,083 $0 $20,354 5,264 $50,715
AND TREASURER 1994 $307,500 $307,500 $754 4,388 $13,109
- --------------------------------------------------------------------------------------------------
JACK F. IRVING 1996 $297,000 $106,122 $600 4,263 $6,837
1995 $290,000 $44,793 $20,634 4,795 $45,406
EXECUTIVE VICE PRESIDENT 1994 $255,000 $136,394 $308 3,638 $11,237
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) The fiscal year of the Company ends January 31. Fiscal years indicated end
January 31 of the following year.
(b) Other Annual Compensation for fiscal year 1996 includes tax reimbursements.
(c) All Other Compensation for fiscal year 1996 includes the following:
Profit Sharing Plan benefit: Mr. Whitacre: $4,949; Ms. Baugh: $4,956; Ms.
Cottle: $4,972; Mr. Goesling: $4,946; Mr. Irving: $4,982.
401(k) Plan benefit: Mr. Whitacre: $3,895; Ms. Baugh: $4,500; Ms. Cottle:
$3,602; Mr. Goesling: $4,053.
Premiums on excess life insurance: Mr. Johnson: $2,910; Mr. Whitacre: $885;
Ms. Baugh: $491; Ms. Cottle: $770; Mr. Goesling: $2,056; Mr. Irving:
$1,855.
Automobile Allowance: Mr. Johnson: $38,200; Mr. Whitacre: $38,364.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning
option grants during fiscal year 1996 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(a) Fiscal Year Per Share Expiration Date 5% 10%
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 2,233 0.60% $51.375 May 21, 2006 $72,147 $182,835
- ----------------------------------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 2,233 0.60% $51.375 May 21, 2006 $72,147 $182,835
2,791 0.75% $41.125 Nov 19, 2006 $72,184 $182,930
- ----------------------------------------------------------------------------------------------------------------------------
JAMMIE BAUGH 1,544 0.41% $51.375 May 21, 2006 $49,886 $126,420
1,929 0.52% $41.125 Nov. 19, 2006 $49,890 $126,432
- ----------------------------------------------------------------------------------------------------------------------------
GAIL A. COTTLE 1,308 0.35% $51.375 May 21, 2006 $42,261 $107,097
1,913 0.51% $41.125 Nov. 19, 2006 $49,476 $125,383
- ----------------------------------------------------------------------------------------------------------------------------
JOHN A. GOESLING 2,074 0.56% $51.375 May 21, 2006 $67,010 $169,816
2,591 0.70% $41.125 Nov. 19, 2006 $67,012 $169,821
- ----------------------------------------------------------------------------------------------------------------------------
JACK F. IRVING 1,895 0.51% $51.375 May 21, 2006 $61,226 $155,160
2,368 0.64% $41.125 Nov. 19, 2006 $61,244 $155,205
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) 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 21, 1996 and on November 19, 1996.
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 1996 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, 1997 January 31, 1997(a)
Acquired on Value -------------------------- --------------------------
Name Exercise Realized(a) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RAYMOND A. JOHNSON 8,996 $210,148 25,890 0 $75,865 $0
- ---------------------------------------------------------------------------------------------------------------
JOHN J. WHITACRE 0 $0 26,044 13,083 $107,184 $9,085
- ---------------------------------------------------------------------------------------------------------------
JAMMIE BAUGH 5,009 $86,424 16,487 9,157 $81,324 $6,514
- ---------------------------------------------------------------------------------------------------------------
GAIL A. COTTLE 7,744 $206,972 17,725 8,071 $69,488 $5,603
- ---------------------------------------------------------------------------------------------------------------
JOHN A. GOESLING 3,302 $65,002 36,528 12,354 $228,156 $8,931
- ---------------------------------------------------------------------------------------------------------------
JACK F. IRVING 4,250 $80,750 37,135 10,911 $264,266 $7,119
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Dollar value is based on the market value of the Company's Common Stock on
the date of exercise or at January 31, 1997, as the case may be, minus the
exercise price.
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(b)
Average Annual -----------------------------------------------------
Compensation(a) 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
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
</TABLE>
(a) 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
10
<PAGE>
Table) less any monthly benefits payable under the Nordstrom Profit Sharing
Retirement Plan. The 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.
(b) The credited years of service to the Company for Raymond A. Johnson, John J.
Whitacre, Jammie Baugh, Gail A. Cottle, John A. Goesling, and Jack F. Irving are
27, 20, 22, 27, 19 and 30, respectively.
COMPENSATION AND
STOCK OPTION
COMMITTEE
REPORT ON FISCAL YEAR
1996 EXECUTIVE
COMPENSATION
The Compensation and Stock Option Committee is comprised
of five directors, and is responsible for setting
compensation levels for the Chairman of the Board of
Directors, the Co-Presidents and the Executive Vice
Presidents of the Company. The Committee also consults
with the Chairman 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 the long-term return to Shareholders. As a
result, the Company's compensation program currently
reflects the following themes:
- Compensation should play a critical role in
attracting and retaining executives whom the Company
deems most able to further its goals.
- A material portion of compensation should be
meaningfully related to Company performance and
value created for Shareholders.
- 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 value drivers which will or
should increase shareholder return.
- Since the Company has chosen a team to oversee the
operations of the Company, compensation
opportunities for the Co-Presidents, who manage
specific areas of the Company's business, and the
Chairman, who oversees the overall operations of the
Company, should be based on the team's effort and
performance of the Company as a whole.
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 the executive officers named in the Summary
Compensation Table. The Company is submitting its 1997
Stock Option Plan for Shareholder approval in part to
comply with regulations
11
<PAGE>
promulgated under Section 162(m) to qualify that plan
under the performance-based compensation exception to the
expense deduction limit. Based on current levels of other
compensation available to the executive officers named in
the Summary Compensation Table, the Company believes there
is no risk of exceeding the $1 million amount for any of
those officers.
The Committee periodically reviews its compensation
philosophy and overall compensation structure. In fiscal
1997, the Committee engaged two outside consultants to
counsel the Committee regarding the possibility of
aligning the Company's executive compensation structure
with additional or different financial measurement
criteria from those the Committee has traditionally used
to determine executive compensation. The Committee will
consider these recommendations during fiscal 1997 for
possible use in future compensation decisions. The
Committee is currently discussing with management how it
perceives other shareholder value driver criteria which
may be more closely tied to total shareholder return and
how those criteria might be utilized in the compensation
system.
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 a
team to manage the business of the Company. With attendant
shared responsibilities, the Company has chosen to set
base salary levels for individuals in this team at levels
which are generally not as high as that of its competitors
with a single chief executive officer. Although the
Company has informally labeled the Chairman as its chief
executive officer to provide disclosure requiring that
designation, the Co-Presidents share certain duties with
the Chairman that would otherwise be included in the
duties of a true chief executive officer.
Base salary increases or decreases are established on an
annual basis and are based on the Committee's view of how
the management team 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 the Committee's assessment of management
skills. None of these factors is
12
<PAGE>
given greater weight than any other factor. The
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 Chairman, 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
1996 were paid only to those executive officers who were
subject to 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 Company has
options outstanding under the 1987 Stock Option Plan,
which expires in August 1997. The 1987 Stock Option Plan
is administered by the Committee. The Committee proposed
to the Board the 1997 Stock Option Plan and, if approved
by the Shareholders, that Plan will also be administered
by the Committee, four members of which are considered
"outside" directors within the meaning of Section 162(m)
of the Internal Revenue Code and "non-employee" directors
under Rule 16b-3 of the Securities Exchange Act of 1934.
The member of the Committee who is not considered an
"outside" or "non-employee" director abstains from any
action taken by the Committee with respect to options
granted to those executive officers who may be named in
the Summary Compensation Table.
The option incentive component of the total compensation
package is intended to retain and motivate executives to
increase total return to the Shareholders. Stock options
have been 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 only during employment
with the Company upon each anniversary of the award, with
full vesting generally after the fourth year following an
award. The number of stock options granted to the
executive officers named in the Summary Compensation Table
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
13
<PAGE>
Company shares that would produce a value 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
semiannually 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. The Committee reserves the
right to change or eliminate the formula at any time.
RETIREMENT. The Nordstrom Profit Sharing Retirement Plan
covers all regular employees of the Company and its
subsidiaries, including the executive officers named in
the Summary Compensation Table. The Board of Directors
determines annually an amount to be contributed by the
Company to the Retirement Plan. Allocation of the
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
1996.
SAVINGS. Pursuant to the Nordstrom Employee Deferral
Retirement Plan, employees may elect to have the Company
pay from 1% to 10% of the employee's compensation, up to a
maximum of $9,500 for calendar year 1996, to the
Retirement Plan instead of paying that amount to the
employee. The Company matches 50% 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.
The Nordstrom Supplemental Executive Retirement Plan
provides retirement benefits to certain executives and key
employees of the Company. This Plan is described in the
note to the Pension Plan Table above.
COMPENSATION OF THE
CHIEF EXECUTIVE
OFFICER
The base salary for the chief executive officer is
determined by the Committee and is based on overall
Company performance. That 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 sales,
improvement in gross margins and the Committee's
assessment of management skills. None of these factors is
given greater weight than any other factor. The base
salaries of the Chairman and the former Co-Chairman were
not changed in 1996, reflecting the absence of any
improvement in the Company's financial performance over
the previous year. The annual bonus incentives for the
Chairman and former Co-Chairman were based solely on
earnings per share targets as previously described. Those
earnings per share targets were not met and the Chairman
and the former Co-
14
<PAGE>
Chairman did not receive any bonus for fiscal year 1996.
The Chairman and the former Co-Chairman received stock
options during fiscal year 1996 pursuant to the formula
used for all Stock Option Plan participants as previously
described.
COMPENSATION AND STOCK OPTION
COMMITTEE
Elizabeth Crownhart Vaughan, Chair
D. Wayne Gittinger
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, 1992 in Nordstrom, Inc. Common Stock and
assumes reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STANDARD & POOR'S S&P RETAIL NORDSTROM, INC.
<S> <C> <C> <C>
500 Index Stores Composite Common Stock
1992 100 100 100
1993 111 118 107
1994 125 111 96
1995 125 105 112
1996 174 111 111
1997 219 133 108
</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 LLP, which rendered legal
services to the Company during the past fiscal year.
PROPOSAL 2:
APPROVAL OF THE 1997
STOCK OPTION PLAN
The Company has granted stock options to its employees
since 1977 under the 1977 and 1987 Stock Option Plans. The
1977 Stock Option Plan expired in August 1987 and the
current plan expires in August 1997. If approved by
Shareholders, the Nordstrom, Inc. 1997 Stock Option Plan
(the "Plan") would enable the Company to continue its
practice of granting stock options as one element of its
compensation program. The following is a summary of the
Plan, a complete copy of which has been filed with the
Commission as an appendix to this proxy statement.
PURPOSE
The purposes of the Plan are to attract and retain the
best available personnel for positions of substantial
responsibility, to provide additional incentive to
employees of the Company or any of its subsidiaries, and
to promote the success of the Company's business.
SHARES SUBJECT TO PLAN
There are 5,000,000 shares of Common Stock authorized for
nonqualified and incentive stock option grants and for
grants of restricted shares of Common Stock under the
Plan, which are subject to adjustment in the event of
stock splits, stock dividends and other situations.
EMPLOYEE PARTICIPANTS
Participants in the Plan include any employee of the
Company or any parent or subsidiary of the Company and are
selected by the Compensation and Stock Option Committee,
or a subcommittee thereof (the "Committee"). The Company
estimates there are approximately 265 persons who would
currently be eligible to participate in the Plan. The Plan
provides that no
16
<PAGE>
participant may be granted in any year more than 50,000
shares of restricted stock, or options to purchase more
than 50,000 shares of Common Stock, as adjusted as
provided in the Plan.
ADMINISTRATION
The Committee shall either (i) consist solely of two or
more non-employee directors of the Company as defined in
Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, or (ii) cause any director who is not a
non-employee director to abstain from any action by the
Committee related to granting options to executive
officers of the Company. The Board of Directors may also
appoint one or more separate committees of the Board of
Directors which may administer the Plan with respect to
employees who are not executive officers of the Company.
The Board of Directors may amend or terminate the Plan as
desired, without further action by the Company's
shareholders, except to the extent required by applicable
law.
TERMINATION
The Plan will continue in effect until all shares of stock
available for grant have been acquired through exercise of
options or otherwise, or for a term of ten (10) years from
its effective date, whichever is earlier. The Plan may be
terminated at such earlier time as the Board of Directors
may determine. Termination of the Plan will not affect the
rights and obligations arising under restricted stock or
options granted under the Plan and then in effect.
TERMS OF STOCK OPTIONS
The Committee may grant incentive stock options as defined
in Section 422 of the Internal Revenue Code of 1986, as
amended, and non-qualified stock options. Options granted
pursuant to the Plan need not be identical but each option
is subject to certain terms and conditions of the Plan.
The exercise price under each option is established by the
Committee. The exercise price may be paid as determined by
the Committee. Options granted expire within a period of
not more than ten (10) years from the grant date. Options
shall be exercisable in such manner and at such times as
the Committee may determine. The Committee, may, at any
time prior to exercise and subject to consent of the
participant, amend, modify or cancel any option previously
granted and may or may not substitute in their place
options at a different price and of a different type under
different terms or in different amounts.
TERMS OF RESTRICTED STOCK
The Committee may grant shares of restricted Common Stock
of the Company with such terms and conditions as may be
determined by the Committee. Grants of shares of
restricted stock shall be made at such cost as the
Committee shall determine and may be issued for no
monetary
17
<PAGE>
consideration, subject to applicable state law. Shares of
restricted stock shall be issued and delivered at the time
of the grant or as otherwise determined by the Committee,
but shall be subject to forfeiture until provided
otherwise in the applicable restricted stock agreement.
Each certificate representing shares of restricted stock
shall bear a legend referring to the risk of forfeiture of
the shares and stating that such shares are
nontransferable until all restrictions have been satisfied
and the legend has been removed. At the discretion of the
Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of
restricted stock from the date of grant.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax
consequences of the Plan is intended to be a summary of
applicable federal law. State and local tax consequences
may differ. Because the federal income tax rules governing
options and related payments are complex and subject to
frequent change, optionees are advised to consult their
tax advisors prior to exercise of options or dispositions
of stock.
Incentive stock options and non-qualified stock options
are treated differently for federal income tax purposes.
Incentive stock options are intended to comply with the
requirements of Section 422 of the Code. Non-qualified
stock options need not comply with such requirements.
An optionee is not taxed on the grant or exercise of an
incentive stock option. The difference between the
exercise price and the fair market value of the shares on
the exercise date will, however, be a preference item for
purposes of the alternative minimum tax. If an optionee
holds the shares acquired upon exercise of an incentive
stock option for at least two years following grant and at
least one year following exercise, the optionee's gain, if
any, upon a subsequent disposition of such shares is long
term capital gain. The measure of the gain is the
difference between the proceeds received on disposition
and the optionee's basis in the shares (which generally
equals the exercise price). If an optionee disposes of
stock acquired pursuant to exercise of an incentive stock
option before satisfying the one and two-year holding
periods described above, the optionee will recognize both
ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be the
lesser of (i) the amount realized on disposition less the
optionee's adjusted basis in the stock (usually the option
price) or (ii) the difference between the fair market
value of the stock on the exercise date and the option
price. The balance of the consideration received on such a
disposition will be long term capital gain if the stock
had been held for at least one year following exercise of
the incentive stock option. The Company is not entitled to
an income tax deduction on the grant or exercise of an
incentive stock option or on the optionee's disposition of
the shares after satisfying the holding period requirement
described above. If the holding periods are not satisfied,
the
18
<PAGE>
Company will be entitled to a deduction in the year the
optionee disposes of the shares, in an amount equal to the
ordinary income recognized by the optionee.
An optionee is not taxed on the grant of an non-qualified
stock option. On exercise, however, the optionee
recognizes ordinary income equal to the difference between
the option price and the fair market value of the shares
on the date of exercise. The Company is entitled to an
income tax deduction in the year of exercise in the amount
recognized by the optionee as ordinary income. Any gain on
subsequent disposition of the shares is long term capital
gain if the shares are held for at least one year
following exercise. The Company does not receive a
deduction for this gain.
A grantee of shares of restricted stock recognizes
ordinary income on the date of receipt equal to the value
of such shares (less any consideration paid by the
grantee) unless the shares of stock are subject to a
substantial risk of forfeiture. If the shares of stock are
subject to a substantial risk of forfeiture, absent an
election by the grantee to be taxed on the date of grant,
then the grantee will recognize ordinary income when the
risk of forfeiture lapses. The Company is entitled to an
income tax deduction in the year the grantee recognizes
income equal to the amount of income recognized by
grantee.
PLAN BENEFITS
The Committee has full discretion to determine the number
and amount of options to be granted to employees under the
Plan, subject to an annual limitation on the total number
of options that may be granted to any employee. Therefore,
the benefits and amounts that will be received by each of
the named executive officers, the executive officers as a
group and all other employees under the Plan are not
presently determinable. Details on stock options granted
during the last three years to certain executive officers
are presented in the Summary Compensation Table.
REQUIRED APPROVAL
The Plan will be approved if the votes cast in favor of
the Plan exceed the votes cast against it. Abstention from
voting or nonvoting by brokers will have no effect since
such actions do not represent votes cast by shareholders.
Unless marked to the contrary, proxies received will be
voted for approval of the Plan.
The Board of Directors recommends a vote for the approval
of the Plan.
19
<PAGE>
PROPOSAL 3:
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 1997. 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 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.
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 1996 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 1998
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 1998 Annual Meeting must be received by the
Company at its principal executive offices on or before
December 1, 1997.
By Order of the Board of Directors,
[KAREN E. PURPUR SIGNATURE]
Karen E. Purpur
Secretary
20
<PAGE>
Seattle, Washington
March 31, 1997
21
<PAGE>
[LOGO]
[RECYCLED LOGO]
Printed on Recycled Paper
<PAGE>
Appendix
NORDSTROM, INC.
1997 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this 1997 Nordstrom Stock
Option Plan (the "Plan") are to attract and retain the best available personnel
for positions of substantial responsibility with Nordstrom, Inc. (the
"Company"), to provide additional incentive in the form of stock options or
shares of restricted Common Stock of the Company (the "Benefits") to employees
of the Company or any parent or subsidiary of the Company which now exists or
hereafter is organized or acquired by or acquires the Company, and to promote
the success of the business.
2. Eligibility. Any employee of the Company or any parent or subsidiary
of the Company may receive Benefits under the Plan.
3. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company, or a subcommittee thereof
(the "Committee"). The Committee shall either (i) consist solely of two or more
non-employee directors of the Company as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, or (ii) cause any director who is
not a non-employee director to abstain from any action by the Committee related
to granting Benefits to executive officers of the Company. The Board of
Directors may also appoint one or more separate committees of the Board of
Directors who may administer the Plan with respect to employees who are not
executive officers of the Company.
4. Effective Date and Termination of Plan. Subject to shareholder
approval, the effective date of the Plan is May 20, 1997. The Plan shall
terminate when all shares of stock subject to Benefits granted under the Plan
shall have been acquired or on May 19, 2007, whichever is earlier, or at such
earlier time as the Board of Directors may determine. Termination of the Plan
will not affect the rights and obligations arising under Benefits granted under
the Plan and then in effect.
5. Shares Subject to the Plan. The stock subject to Benefits authorized
to be granted under the Plan shall consist of 5,000,000 shares of the Company's
common stock, no par value, or the number and kind of shares of stock or other
securities which shall be substituted or adjusted for such shares as provided in
Section 8. All or any shares of stock subject to Benefits which for any reason
terminate may again be made subject to Benefits under the Plan.
6. Grant, Terms and Conditions of Options. Incentive stock options as
defined in Section 422 of the Internal Revenue Code of 1986, as amended and
non-qualified stock options may be granted by the Committee at any time and
from time to time prior to the termination of the Plan to those employees of
the Company or any parent or subsidiary of the Company who, in the
Committee's judgment, are largely responsible through their judgment,
interest, ability and special efforts for the successful conduct of the
Company's operations. However, no
<PAGE>
participant shall be granted options in any year to purchase more than 50,000
shares of the Company's common stock as adjusted as provided in Section 8.
No participant shall have any rights as a shareholder of the Company
with respect to any shares of stock underlying any option granted hereunder
until those shares have been issued. Each option shall be evidenced by a
written stock option agreement which will expressly identify the option as an
incentive stock option or as a non-qualified stock option. Furthermore, the
grant of an incentive option pursuant to the Plan shall in no way be construed
as an alternative to the right of an optionee to purchase stock pursuant to any
present or future grant of a non-qualified option under any of the Company's
current or future stock option plans. Options granted pursuant to the Plan need
not be identical but each option is subject to the terms of the Plan and is
subject to the following terms and conditions:
6.1 Price. The exercise price of each option granted under the Plan
shall be established by the Committee. The exercise price may be paid as
determined by the Committee.
6.2 Duration and Exercise or Termination of Option. Each option
granted under the Plan shall be exercisable in such manner and at such
times as the Committee shall determine. Each option granted must expire
within a period of ten (10) years from the grant date.
6.3 Transferability of Options. Each option shall be transferable
only by will or the laws of descent and distribution except and unless the
option provides for additional rights to transfer.
6.4 Other Terms and Conditions. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing
terms, as the Committee shall deem appropriate. No option, however, nor
anything contained in the Plan shall confer upon any participant any right
to continue in the Company's employ or service nor limit in any way the
Company's right to terminate his or her employment or service at any time.
7. Grant, Terms and Conditions of Restricted Stock. The Committee may
grant shares of restricted common stock of the Company with such terms and
conditions as may be determined in the sole discretion of the Committee.
Grants of shares of restricted stock shall be made at such cost as the
Committee shall determine and may be issued for no monetary consideration,
subject to applicable state law. Shares of restricted stock shall be issued
and delivered at the time of the grant or as otherwise determined by the
Committee, but may be subject to forfeiture until provided otherwise in the
applicable restricted stock agreement. Each certificate representing shares
of restricted stock shall bear a legend referring to the risk of forfeiture
of the shares and stating that such shares are nontransferable until all
restrictions have been satisfied and the legend has been removed. At the
discretion of the Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of
2
<PAGE>
restricted stock from the date of grant. No participant shall be granted
more than 50,000 shares of restricted stock of the Company in any year, as
adjusted as provided in Section 8.
8. Adjustment Upon Changes in Capitalization/Change in Control. The
number and kind of shares of Company stock subject to Benefits under the Plan
shall be appropriately adjusted along with a corresponding adjustment in the
option exercise price, if applicable, to reflect any stock dividend, stock
split, split-up or any combination or exchange of shares, however accomplished.
An appropriate adjustment shall also be made with respect to the aggregate
number and kind of shares available for grant under the Plan. If the Company or
the shareholders of the Company enter into an agreement to dispose of all or
substantially all of the assets or shares by means of a sale, a reorganization,
a liquidation, or otherwise, all options shall become immediately exercisable
with respect to the full number of shares subject to those options and all
restrictions on any shares of restricted stock granted under the Plan shall be
immediately removed.
9. Withholding. To the extent required by applicable federal, state,
local or foreign law, a participant shall make arrangements satisfactory to the
Company for the satisfaction of any withholding tax obligations that arise
pursuant to Benefits granted under the Plan. The Company shall not be required
to issue shares until such obligations are satisfied. The Committee may (but
shall not be required to) permit these obligations to be satisfied by having the
Company withhold a portion of the shares of stock that otherwise would be issued
to the participant or by delivering shares previously owned by the participant.
10. Amendment and Termination. The Board of Directors may amend or
terminate the Plan as desired, without further action by the Company's
shareholders, except to the extent required by applicable law.
3
<PAGE>
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NORDSTROM, INC.
1501 FIFTH AVENUE, SEATTLE, WA 98101-1603
By signing this Proxy, the Shareholder 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 20, 1997 in Seattle,
Washington, at 11:00 a.m., Pacific Daylight Time, and any adjournment thereof,
with all power the Shareholder would possess if personally present.
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, 2 and 3 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.
- --------------------------------------------------------------------------------
Please Mark, Date, Sign and Return this proxy card
promptly using the enclosed postage-paid envelope.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
DIRECT DEPOSIT OF DIVIDEND
Nordstrom is pleased to offer its shareholders of record the ability to have
quarterly dividends electronically deposited. This service is provided at no
cost to you and enables you to have your dividends deposited on the date payable
in an account at the financial institution of your choice.
The advantages of having your dividend payment electronically deposited include:
the availability of funds on the date payable, the elimination of a trip to the
bank and no possibility of a stolen or lost check.
Should you wish to take advantage of this service, please contact ChaseMellon
Shareholder Services at 1-800-522-6645 or Nordstrom Investor Relations at
1-206-233-6301.
NORDSTROM
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Please mark
your votes as /X/
indicated in
this example
FOR all nominees
PROPOSAL 1-ELECTION OF DIRECTORS (except as indicated to WITHHOLD AUTHORITY
the contrary below) to vote for all nominees FOR AGAINST ABSTAIN
P. M. Condit, D. W. Gittinger, / / / / PROPOSAL 2-
E. Hernandez, Jr., C. A. Lynch, APPROVAL OF / / / / / /
A. D. McLaughlin, J. A. McMillan, THE 1997 NORDSTROM
B. A. Nordstrom, J. N. Nordstrom, STOCK OPTION
A. E. Osborne, Jr., PLAN
W. D. Ruckelshaus, E. C. Vaughan, FOR AGAINST ABSTAIN
J. J. Whitacre PROPOSAL 3-
RATIFICATION / / / / / /
To withhold authority to vote for OF APPOINTMENT
any individual nominee, write that OF AUDITORS
nominee's name on the space provided
below. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON 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.
</TABLE>
Signature(s) Dated 1997
-------------------------------------- -----------
PLEASE SIGN AS NAME APPEARS ON THIS PROXY. Joint signers should each sign.
Trustees, Guardians, Personal and other Representatives, please indicate
full title.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
BE ON THE LOOKOUT FOR A NEW NORDSTROM NEAR YOU
<TABLE>
<S> <C> <C>
OPENING SPRING OF 1997 OPENING SPRING OF 1998 OPENING FALL 1999*
Costa Mesa, California Atlanta, Georgia Providence, Rhode Island
Metro Point (Rack) Perimeter Mall Providence Place
San Diego, California
Mission Valley (Rack) Overland Park, Kansas Mission Viejo, California
Oak Park Mall Mission Viejo Shopping Center
Bellevue, Washington
Factoria Mall (Rack) OPENING FALL OF 1998 Hurst, Texas
North East Mall
Seattle, Washington
OPENING FALL OF 1997 Downtown Seattle
Long Island, New York OPENING FALL 2000*
Roosevelt Field San Diego, California
Fashion Valley (expansion) Honolulu, Hawaii
West Hartford, Connecticut Ala Moana Shopping Center
Westfarms Mall Scottsdale, Arizona
Scottsdale Fashion Square Columbia, Maryland
Beachwood, Ohio Columbia Mall
Beachwood Place
OPENING SPRING OF 1999* *tentative
Long Island, New York
The Mall at The Source (Rack) Norfolk, Virginia
MacArthur Center
Beverly Hills, California
Faconnable Boutique Spokane, Washington
Downtown Spokane
</TABLE>
NORDSTROM
- --------------------------------------------------------------------------------
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NORDSTROM, INC.
1501 FIFTH AVENUE, SEATTLE, WA 98101-1603
By signing this Proxy, the Shareholder 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 20, 1997 in
Seattle, Washington, at 11:00 a.m., Pacific Daylight Time, and any
adjournment thereof, with all power the Shareholder would possess if
personally present.
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, 2 and 3 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.
Please Mark, Date, Sign and Return this proxy card promptly using the
enclosed postage-paid envelope.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
Dear Plan Participant:
Since you have a portion of your Nordstrom P.S. PLUS 401(k) account in the
Nordstrom Stock Fund, you have the right to vote the shares of Nordstrom
stock held for your account. This same proxy and voting information is
furnished to all Nordstrom shareholders.
The Trustee of the Nordstrom Stock Fund (Wells Fargo Bank) will receive your
signed proxy and instructions, along with those made by other participants,
and cast the resulting vote on behalf of the Fund as a whole to the Company.
YOUR VOTE WILL BE KEPT IN STRICT CONFIDENCE BY THE TRUSTEE.
YOUR VOTE IS VERY IMPORTANT. Please return only this proxy card in the
enclosed envelope. Do not combine it with any other proxy cards you may
receive as they may be tabulated by a different system. You must execute and
return this proxy card if you wish to vote these shares.
NORDSTROM
<PAGE>
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE /X/
PROPOSAL 1-ELECTION OF DIRECTORS FOR ALL NOMINEES
(except as indicated to WITHHOLD AUTHORITY to
the contrary below) vote for all nominees
P. M. Condit, D. W. Gittinger, / / / /
E. Hernandez, Jr., C. A. Lynch,
A. D. McLaughlin, J. A. McMillan,
B. A. Nordstrom, J. N. Nordstrom,
A. E. Osborne, Jr., W. D.
Ruckelshaus, E. C. Vaughan,
J. J. Whitacre
To withhold authority to vote for
any individual nominee, write that
nominee's name on the space
provided below.
- ---------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2-APPROVAL OF THE 1997 / / / / / /
NORDSTROM STOCK OPTION PLAN
FOR AGAINST ABSTAIN
PROPOSAL 3-RATIFICATION OF / / / / / /
APPOINTMENT OF AUDITORS
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON 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.
Signature(s)___________________________________________ Dated ____________, 1997
PLEASE SIGN AS NAME APPEARS ON THIS PROXY. JOINT SIGNERS SHOULD EACH SIGN.
TRUSTEES, GUARDIANS, PERSONAL AND OTHER REPRESENTATIVES, PLEASE INDICATE FULL
TITLE.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
BE ON THE LOOKOUT FOR A NEW NORDSTROM NEAR YOU
OPENING SPRING OF 1997
Costa Mesa, California
Metro Point (Rack)
San Diego, California
Mission Valley (Rack)
Bellevue, Washington
Factoria Mall (Rack)
OPENING FALL OF 1997
Long Island, New York
Roosevelt Field
West Hartford, Connecticut
Westfarms Mall
Beachwood, Ohio
Beachwood Place
Long Island, New York
The Mall at The Source (Rack)
Beverly Hills, California
Faconnable Boutique
OPENING SPRING OF 1998
Atlanta, Georgia
Perimeter Mall
Overland Park, Kansas
Oak Park Mall
OPENING FALL OF 1998
Seattle, Washington
Downtown Seattle
San Diego, California
Fashion Valley (expansion)
Scottsdale, Arizona
Scottsdale Fashion Square
OPENING SPRING OF 1999*
Norfolk, Virginia
MacArthur Center
Spokane, Washington
Downtown Spokane
OPENING FALL 1999*
Providence, Rhode Island
Providence Place
Mission Viejo, California
Mission Viejo Shopping Center
Hurst, Texas
North East Mall
OPENING FALL 2000*
Honolulu, Hawaii
Ala Moana Shopping Center
Columbia, Maryland
Columbia Mall
*tentative
NORDSTROM
