<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
File No. 333-69281
Prospectus Supplement to Prospectus Dated January 13, 1999.
$300,000,000
[NORDSTROM LOGO]
8.95% Senior Notes due October 15, 2005
------------------------
Nordstrom, Inc. will pay interest on the Notes on April 15 and October 15
of each year. The first such payment will be made on April 15, 2001. The Notes
will be issued only in denominations of $1,000 and integral multiples of $1,000.
Nordstrom has the option to redeem all or a portion of the Notes at any
time. The redemption price will be based on the present value of the scheduled
payments of principal and interest remaining at the time of redemption, plus
accrued interest. The discount rate used will be based on a U.S. Treasury
security having a remaining life to maturity comparable to the Notes, plus 50
basis points. The redemption price will not be less than 100% of the principal
amount of the Notes to be redeemed.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public offering price....................................... 99.630% $298,890,000
Underwriting discount....................................... 0.600% $ 1,800,000
Proceeds, before expenses, to Nordstrom, Inc................ 99.030% $297,090,000
</TABLE>
The public offering price set forth above does not include accrued
interest, if any. Interest on the Notes will accrue from October 23, 2000 and
must be paid by the purchaser if the Notes are delivered after October 23, 2000.
------------------------
The underwriters expect to deliver the Notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on October 23, 2000.
Joint Book-Runners and Lead Underwriters
BANC OF AMERICA SECURITIES LLC GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON BANC ONE CAPITAL MARKETS, INC.
LOOP CAPITAL MARKETS, LLC MURIEL SIEBERT & CO., INC. REDWOOD SECURITIES GROUP,
INC.
------------------------
Prospectus Supplement dated October 19, 2000.
<PAGE> 2
NORDSTROM
Nordstrom, Inc. ("Nordstrom") is a specialty retailer selling a wide
selection of apparel, shoes and accessories for women, men and children. Most of
Nordstrom's merchandise categories are offered in each of its 76 large fashion
specialty stores currently located in 22 states. In addition, Nordstrom operates
35 clearance stores in 15 states under the name "Nordstrom Rack," one clearance
store in Arizona under the name "Last Chance Shoes and Apparel," three specialty
stores in California and New York under the name "Faconnable" and two shoe
stores in Hawaii. Nordstrom's marketing philosophy is to offer a wide selection
of merchandise, to create customer loyalty by providing a high level of customer
service and to respond rapidly to local market conditions and fashion trends.
Nordstrom's executive offices are located at 1617 Sixth Avenue, Seattle,
Washington 98101, telephone (206) 628-2111. Nordstrom's common stock is traded
on the New York Stock Exchange under the symbol "JWN."
RECENT DEVELOPMENTS
On September 27, 2000, Nordstrom signed a definitive agreement to acquire
Faconnable, S.A. Faconnable is a French designer, wholesaler and retailer of
high quality men's and women's apparel and accessories. The purchase price
consists of E100 million (approximately $84 million based on the rate of
exchange on October 19, 2000) and approximately five million shares of
Nordstrom's common stock. Based on the market price of Nordstrom's common stock
on October 19, 2000, the total cost to Nordstrom of the acquisition would be
approximately $164 million. The transaction is expected to close in late October
2000, subject to customary closing conditions. Nordstrom may also have to make
an additional cash payment to the seller five years after the acquisition closes
based on the performance of the Faconnable brand and the continued active
involvement of the principals in Faconnable.
In August 2000, Nordstrom appointed Blake W. Nordstrom as President and
Bruce A. Nordstrom as Chairman of the Board of Directors of Nordstrom following
John J. Whitacre's resignation as Chief Executive Officer and Chairman of the
Board of Directors of Nordstrom. At the same time, Michael A. Stein, former
Executive Vice President and Chief Financial Officer, left Nordstrom. Nordstrom
is engaged in a search for a new Chief Financial Officer. In September 2000,
Martha S. Wikstrom, Executive Vice President and President of the Full Line
Store Group, and F. Richard Lennon, Vice President and Chief Information
Officer, resigned. Under Nordstrom's severance policy, Nordstrom estimates that
it will incur approximately $13 million in severance expenses during the quarter
ending October 31, 2000 to cover severance payments to Mr. Whitacre, Ms.
Wikstrom, Mr. Lennon and Mr. Stein.
Nordstrom recently announced its unaudited, preliminary sales figures for
the month of September 2000. Total sales for the month of September were $422
million. Adjusting for differences in the specific days of the week that
comprise the months of September 1999 and 2000, total sales increased
approximately 12.0 percent over September 1999, while same store sales in
September 2000 increased approximately 4.3 percent.
During the quarter ended July 31, 2000, Nordstrom recorded a charge of
$10.5 million related to the impairment of its investment in an internet grocery
company. It is anticipated that an additional charge estimated between $18 to
$20 million will be taken in the quarter ending October 31, 2000 to recognize a
further decline in the market value of this investment. It is also anticipated
that a charge of approximately $10 million will be taken in the quarter ending
October 31, 2000 for the write-off of certain information technology
investments.
S-2
<PAGE> 3
USE OF PROCEEDS
Nordstrom will use the net proceeds from the sale of the Notes offered
hereby (the "Notes") (after deduction of underwriting discounts and commissions
and expenses payable by Nordstrom), estimated to be approximately $296.8
million, to reduce short-term indebtedness incurred for working capital by
approximately $200 million, to fund the acquisition of Faconnable, S.A. and for
general corporate purposes. At October 19, 2000, Nordstrom's short-term
indebtedness carried a weighted average interest cost of 6.56%.
S-3
<PAGE> 4
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below under the
captions "Operating Results" and "Balance Sheet Data" for, and as of the end of,
each of the years in the five-year period ended January 31, 2000 have been
derived from the audited consolidated financial statements of Nordstrom. The
selected consolidated financial data presented below under the captions
"Operating Results" and "Balance Sheet Data" as of and for the six month periods
ended July 31, 1999 and 2000 have been derived from unaudited interim condensed
consolidated financial information of Nordstrom. In the opinion of management,
the unaudited interim condensed consolidated financial information has been
prepared on the same basis as the audited consolidated financial statements and
includes all adjustments, consisting only of normal recurring adjustments,
necessary to fairly state the information set forth therein. The results of
operations for the six months ended July 31, 2000 are not necessarily indicative
of results to be expected for the full fiscal year or for any future period.
This information is qualified in its entirety by and should be read in
conjunction with the detailed information and financial statements and
applicable management's discussion and analysis included in Nordstrom's Annual
Report on Form 10-K for the year ended January 31, 2000 and Quarterly Reports on
Form 10-Q for the quarters ended April 30, 2000 and July 31, 2000.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JULY 31,
FISCAL YEAR ENDED JANUARY 31, (UNAUDITED)
------------------------------------------------------------------- -------------------------
1996 1997 1998 1999 2000 1999 2000
----------- ----------- ----------- ----------- ----------- ----------- -----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND PER SQUARE FOOT AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales............. $ 4,106,817 $ 4,448,019 $ 4,851,624 $ 5,027,890 $ 5,124,223 $ 2,482,500 $ 2,595,794
Net earnings.......... 163,556 146,316 186,213 206,723 202,557 102,377 78,190
Basic earnings per
share............... 1.00 0.90 1.20 1.41 1.47 0.73 0.60
Diluted earnings per
share............... 1.00 0.90 1.20 1.41 1.46 0.72 0.60
Cash dividends paid
per share........... 0.25 0.25 0.265 0.30 0.32 0.16 0.17
BALANCE SHEET DATA (AT
PERIOD END):
Total assets.......... $ 2,732,619 $ 2,726,495 $ 2,890,664 $ 3,088,063 $ 3,062,081 $ 3,101,948 $ 3,316,375
Notes payable......... 232,501 163,770 263,767 78,783 70,934 -- 213,020
Long-term debt
including current
portion............. 439,943 380,632 420,865 868,234 804,982 863,294 773,158
Shareholders'
equity.............. 1,408,053 1,457,084 1,458,950 1,300,545 1,185,614 1,274,278 1,153,931
OTHER DATA:
Ratio of earnings to
fixed charges(1).... 5.13x 4.96x 5.91x 5.53x 5.20x 5.24x 4.04x
Number of stores (at
period end)......... 78 83 92 97 104 99 110
Total square footage
(at period end)..... 10,713,000 11,754,000 12,614,000 13,593,000 14,487,000 13,813,000 14,858,000
Net sales per square
foot................ $ 382 $ 377 $ 384 $ 362 $ 350 $ 347 $ 336
</TABLE>
---------------
(1) For the purpose of this ratio, earnings consist of earnings before income
taxes plus fixed charges less capitalized interest. Fixed charges consist of
interest expense, capitalized interest and the estimated interest portion of
rent expense.
S-4
<PAGE> 5
DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued under an Indenture dated January 13, 1999 between
Nordstrom and Wells Fargo Bank West, N.A. (formerly Norwest Bank Colorado,
National Association), as trustee. Provisions of the Indenture are more fully
described under the heading "Description of the Debt Securities" in the
accompanying prospectus.
The Notes will mature on October 15, 2005(unless previously redeemed), and
will be initially limited to an aggregate principal amount of $300,000,000,
except that additional Notes may be issued without the consent of holders.
Interest on the Notes will accrue from October 23, 2000 and will be payable
semiannually, on each April 15 and October 15, beginning April 15, 2001, to the
persons in whose names the Notes are registered at the close of business on
April 1 or October 1 before the applicable interest payment date at an initial
annual interest rate of 8.95%. Interest on the Notes will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
Nordstrom will issue the Notes only in book-entry form through the
facilities of The Depository Trust Company, as depositary (the "Global Notes").
The Notes will be in denominations of $1,000 and integral multiples of $1,000.
Transfers or exchanges of beneficial interests in Global Notes may be effected
only through a participating member of the depositary. See "-- Global Notes." As
described in the accompanying prospectus, under certain circumstances, Notes may
be issued in certificated form in exchange for the Global Notes. In the event
that Notes are issued in certificated form, they may be transferred or exchanged
at the offices described in the immediately following paragraph.
Payments on the Global Notes will be made to the depositary. If the Notes
are issued in certificated form, Nordstrom will pay any principal and interest
to the office of the trustee at Wells Fargo Bank Minnesota, N.A., Corporate
Trust Operations, Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479-0113. Notes issued in certificated form will be registrable at the office
of the trustee, and the Notes will be exchangeable for Notes having identical
terms and provisions at the same office. Nordstrom will maintain the option,
however, of paying interest on Notes issued in certificated form by check mailed
to the address of the person entitled to such interest as shown on the
securities register.
INTEREST RATE ADJUSTMENT
Nordstrom's current senior unsecured debt rating by Moody's Investor
Service, Inc. ("Moody's") is A2 with review for possible downgrade. Nordstrom's
current senior unsecured debt rating by Standard & Poor's Ratings Services
("S&P") of A is on "CreditWatch" with negative implications.
The interest rate payable on the Notes will be subject to adjustment
during the life of the Notes. In the event of a rating change by Moody's and/or
S&P that causes the ratings by either agency to be below the investment grade
category (below Baa3 for Moody's and below BBB- for S&P), the interest rate on
the Notes will be adjusted.
The Notes will bear interest at the applicable initial interest rate from
the date of issuance of the Notes up until the date on which this rating change
occurs (the "Step-Up Date"). Beginning with and including the Step-Up Date, the
Notes will bear interest at the adjusted interest rate per annum set forth
below. The adjusted interest rate per annum for a Note is the respective Note's
initial interest rate increased by 200 basis points.
If on any date (the "Step-Down Date") subsequent to a step-up in the
interest rate as a result of a rating change by Moody's and/or S&P, a new rating
change by Moody's and/or S&P causes the ratings of both agencies to be above the
non-investment grade category (above Ba1 for Moody's and above BB+ for S&P), the
interest payable on the Notes will be decreased by 200 basis points effective
from and including the Step-Down Date.
There is no limit on the number of times the interest rate payable on the
Notes can be adjusted up or down based on rating changes by Moody's and S&P
during the life of the Notes.
S-5
<PAGE> 6
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at Nordstrom's option
at any time. The redemption price for the Notes to be redeemed will equal the
greater of the following amounts, plus, in each case, accrued and unpaid
interest thereon to the redemption date:
- 100% of the principal amount of such Notes; or
- as determined by a Reference Treasury Dealer (as defined below), the sum
of the present values of the remaining scheduled payments of principal
and interest on the Notes (not including any portion of any payments of
interest accrued as of the redemption date) discounted to the redemption
date on a semiannual basis at the Adjusted Treasury Rate (as defined
below).
The redemption price will be calculated assuming a 360-day year consisting of
twelve 30-day months.
"ADJUSTED TREASURY RATE" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date plus 50 basis points.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by a Reference Treasury Dealer as having a maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"COMPARABLE TREASURY PRICE" means, with respect to any redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"REFERENCE TREASURY DEALER" means Banc of America Securities LLC, Goldman,
Sachs & Co. and their respective successors and any other primary U.S.
Government securities dealer selected by the trustee after consultation with
Nordstrom.
"REFERENCE TREASURY DEALER QUOTATION" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third business day preceding such redemption date.
Nordstrom will mail notice of any redemption at least 30 days but not more
than 60 days before the redemption date to each holder of the Notes to be
redeemed.
Unless Nordstrom defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Notes or portions
thereof called for redemption.
The Notes will not be entitled to the benefit of a sinking fund.
GLOBAL NOTES
The Notes will be issued in the form of one or more Global Notes. The
Global Notes will be deposited with, or on behalf of the depositary, and
registered in the name of a nominee of the depositary. Except under the limited
circumstances described in the accompanying prospectus under the heading
"Description of Debt Securities -- Global Securities," owners of beneficial
interests in Global Notes will not be entitled to physical delivery of Notes in
certificated form. Global Notes may not be transferred except as a whole by the
depositary to a nominee of the depositary. Global Notes may also be transferred
by a nominee of the depositary to the depositary or another nominee of the
depositary. The depositary or any nominee may transfer Global Notes to a
successor of the depositary or a nominee of such successor.
S-6
<PAGE> 7
The depositary has advised Nordstrom and the underwriters as follows: The
depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movements of securities certificates. The depositary's participants
include securities brokers and dealers (including the underwriters), banks,
trust companies, clearing corporations, and certain other organizations, some of
whom (and/or their representatives) own the depositary. Access to the
depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by the depositary only
through participants.
S-7
<PAGE> 8
UNDERWRITING
Nordstrom and the underwriters for the offering (the "Underwriters") named
below have entered into an underwriting agreement with respect to the Notes.
Subject to certain conditions, each Underwriter has severally agreed to purchase
the principal amount of Notes indicated in the following table.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES
------------ ----------------
<S> <C>
Banc of America Securities LLC.............................. $127,500,000
Goldman, Sachs & Co......................................... 127,500,000
Credit Suisse First Boston Corporation...................... 24,000,000
Banc One Capital Markets, Inc............................... 12,000,000
Loop Capital Markets, LLC................................... 3,000,000
Muriel Siebert & Co., Inc................................... 3,000,000
Redwood Securities Group, Inc............................... 3,000,000
------------
Total........................................ $300,000,000
============
</TABLE>
------------------------
Notes sold by the Underwriters to the public will initially be offered at
the public offering price set forth on the cover of this prospectus supplement.
Any Notes sold by the Underwriters to securities dealers may be sold at a
discount from the public offering price of up to 0.350% of the principal amount
of the Notes. Any such securities dealers may resell any Notes purchased from
the Underwriters to certain other brokers or dealers at a discount from the
public offering price of up to 0.250% of the principal amount of the Notes. If
all the Notes are not sold at the initial offering price, the Underwriters may
change the offering price and the other selling terms.
The Notes are a new issue of securities with no established trading
market. Nordstrom has been advised by the Underwriters that the Underwriters
intend to make a market in the Notes, but they are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Notes.
In connection with the offering of the Notes, the Underwriters may
purchase and sell the Notes in the open market. These transactions may include
short sales, stabilizing transactions and purchases to cover positions created
by short sales. Short sales involve the sale by the Underwriters of a greater
aggregate principal amount of Notes than they are required to purchase in the
offering. Stabilizing transactions consist of certain bids or purchases made for
the purpose of preventing or retarding a decline in the market price of the
Notes while the offering is in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the Underwriters have repurchased Notes sold by
or for the account of such Underwriter in stabilizing or short covering
transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the Underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
In the ordinary course of business, certain of the Underwriters have in
the past performed, and may in the future perform, investment banking services
for Nordstrom for which they have received, and may in the future receive, fees
or other compensation.
Nordstrom estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$300,000.
S-8
<PAGE> 9
Nordstrom has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
LEGAL MATTERS
Lane Powell Spears Lubersky LLP, Seattle, Washington, will pass upon the
validity of the Notes for Nordstrom. D. Wayne Gittinger, a partner in that firm,
is also a director of Nordstrom. At October 1, 2000, members of the firm
beneficially owned, directly or indirectly, a total of approximately 10,500,000
shares of Nordstrom's common stock. Brown & Wood LLP, New York, New York, will
pass upon the validity of the Notes for the Underwriters.
S-9
<PAGE> 10
PROSPECTUS
BY THIS PROSPECTUS
NORDSTROM, INC.
MAY OFFER
DEBT SECURITIES
DEBT WARRANTS
COMMON STOCK
COMMON STOCK WARRANTS
CURRENCY WARRANTS
------------------------
COMMON STOCK TRADING SYMBOL
NASDAQ NATIONAL MARKET "NOBE"
------------------------
We will provide the specific terms of these securities in supplements to
this prospectus. The prospectus supplement may also add, update or change
information contained or incorporated by reference in this prospectus. You
should read this prospectus and any prospectus supplement carefully before you
invest.
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
Our principal executive offices are located at 1617 Sixth Avenue, Seattle,
Washington 98101, telephone number (206) 628-2111.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------
The date of this prospectus is January 13, 1999.
<PAGE> 11
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any reports, proxy statements and other information filed by us at the
SEC's Public Reference Rooms at (a) 450 Fifth Street, N.W., Washington, D.C.
20549; (b) Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and (c) Seven World Trade Center, New York, New York 10048.
You can also request copies of these documents, upon payment of a duplicating
fee, by writing to the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the SEC's Public Reference Rooms. Our SEC
filings are also available to the public on the SEC's Internet site
(http://www.sec.gov).
We have filed a registration statement on Form S-3 with the SEC covering
the securities described in this prospectus. For further information with
respect to us and those securities, you should refer to our registration
statement and its exhibits. We have summarized certain key provisions of
contracts and other documents that we refer to in this prospectus. Because a
summary may not contain all the information that is important to you, you should
review the full text of the document. We have included copies of these documents
as exhibits to our registration statement.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to another document that we filed with the SEC. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), until we sell all of the securities.
- Our Annual Report to Shareholders, Form 10-K and Form 10-KA for the
fiscal year ended January 31, 1998;
- Our Quarterly Reports on Form 10-Q for the quarters ended April 30, 1998,
July 31, 1998, and October 31, 1998;
- Our Current Report on Form 8-K dated March 11, 1998.
You may request a copy of these filings (other than exhibits) at no cost,
by writing or telephoning us at 1321 Second Avenue, Seattle, Washington 98101,
telephone (206) 233-6248, attention Corporate Secretary.
You should rely only on the information contained or incorporated by
reference in this prospectus, any prospectus supplement or any pricing
supplement. We have not authorized anyone to provide you with any other
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus, any accompanying prospectus supplement or any document incorporated
by reference is accurate as of any date other than the date on the front of the
document.
NORDSTROM, INC.
Nordstrom, Inc. ("Nordstrom") is a specialty retailer selling a wide
selection of apparel, shoes and accessories for women, men and children. Most of
Nordstrom's merchandise categories are offered in each of its 68 large fashion
specialty stores currently located in 21 states. In addition, Nordstrom operates
25 clearance stores in 11 states under the name "Nordstrom Rack," one clearance
store in Arizona under the name "Last Chance Shoes and Apparel," three specialty
stores in California and New York under the name "Faconnable" and two shoe
stores in Hawaii. Nordstrom's marketing philosophy is to offer a wide selection
of merchandise, to create customer loyalty by providing a high level of customer
service and to respond rapidly to local market conditions and
2
<PAGE> 12
fashion trends through decentralized buying and merchandise selection.
Nordstrom's executive offices are located at 1617 Sixth Avenue, Seattle,
Washington 98101, telephone (206) 628-2111.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement,
Nordstrom will use the net proceeds from the sale of any securities offered by
this prospectus for general corporate purposes. Examples of general corporate
purposes include additions to working capital, repayment of existing debt,
acquisitions, repurchases of common stock and store expansion.
RATIO OF EARNINGS TO FIXED CHARGES
The following table contains Nordstrom's ratio of earnings to fixed charges
for each of the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------------- --------------
1994 1995 1996 1997 1998 1997 1998
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 4.95x 6.79x 5.14x 4.99x 5.91x 5.43x 5.11x
</TABLE>
---------------
For purposes of this ratio, earnings consist of earnings before income
taxes plus fixed charges less capitalized interest. Fixed charges consist of
interest expense, capitalized interest, and the estimated interest portion of
rent expense.
3
<PAGE> 13
GENERAL DESCRIPTION OF THE OFFERED SECURITIES
Nordstrom may from time to time offer under this prospectus, separately or
together: (i) unsecured debt securities ("Debt Securities"), which may be senior
debt securities, ("Senior Debt Securities") or subordinated debt securities
("Subordinated Debt Securities"), (ii) warrants to purchase the Debt Securities
("Debt Warrants"), (iii) shares of Common Stock, no par value, (iv) warrants to
purchase shares of Common Stock ("Stock Warrants") and (v) warrants to receive
from Nordstrom the cash value in U.S. dollars of the right to purchase
("Currency Call Warrants") or to sell ("Currency Put Warrants") such foreign
currency or currency units as shall be designated by Nordstrom at the time of
offering (such securities are collectively referred to herein as the "Offered
Securities"). The aggregate offering price of Offered Securities offered by
Nordstrom by a prospectus supplement will not exceed $600,000,000.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth the material
terms and provisions of the Debt Securities to which any prospectus supplement
may relate. The Senior Debt Securities are to be issued under an Indenture (the
"Senior Indenture"), between Nordstrom and Norwest Bank Colorado, National
Association, as Trustee (the "Trustee"), a copy of which is filed as an exhibit
to the registration statement of which this prospectus is a part. The
Subordinated Debt Securities are to be issued under an Indenture between
Nordstrom and the Trustee (the "Subordinated Indenture"), a copy of the form of
which is filed as an exhibit to the registration statement of which this
prospectus is a part. The Senior Indenture and the Subordinated Indenture are
sometimes referred to herein collectively as the "Indentures" and each
individually as an "Indenture." The particular terms of the Debt Securities
offered by any prospectus supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Offered Debt
Securities, will be described in the prospectus supplement relating to such
Offered Debt Securities.
The following summaries of the material provisions of the Indentures and
the Debt Securities do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Indentures, including the definitions therein of certain terms, and such Debt
Securities. Wherever particular articles, sections or defined terms of an
Indenture are referred to, it is intended that such articles, sections or
defined terms shall be incorporated herein by reference, and the statement in
connection with which such reference is made is qualified in its entirety by
such reference. The Indentures are substantially identical, except for certain
covenants of Nordstrom and provisions relating to subordination.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued thereunder from time to time in one or more series. (Section 3.1) The
Indentures do not limit the amount of other indebtedness or Debt Securities,
other than certain secured indebtedness as described below, which may be issued
by Nordstrom or its Subsidiaries.
Unless otherwise provided in a prospectus supplement, the Senior Debt
Securities will be unsecured obligations of Nordstrom and will rank on a parity
with all other unsecured and unsubordinated indebtedness of Nordstrom. The
Subordinated Debt Securities will be unsecured obligations of Nordstrom,
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (which term includes Senior Debt Securities) of Nordstrom as
described below under "Subordination of Subordinated Debt Securities" and in the
applicable prospectus supplement.
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The prospectus supplement relating to the particular Debt Securities
offered thereby will describe the following terms of the Offered Debt
Securities:
<TABLE>
<S> <C>
(i) the title of the Offered Debt Securities and the series in
which such Offered Debt Securities shall be included, which
may include medium-term notes;
(ii) any limit upon the aggregate principal amount of the Offered
Debt Securities;
(iii) the date or dates, or the method or methods, if any, by
which such date or dates shall be determined, on which the
principal of such Offered Debt Securities will be payable;
(iv) the rate or rates at which the Offered Debt Securities will
bear interest, if any, which rate may be zero in the case of
certain Debt Securities issued at an issue price
representing a discount from the principal amount payable at
maturity, or the method by which such rate or rates will be
determined (including, if applicable, any remarketing option
or similar method), and the date or dates from which such
interest, if any, will accrue or the method by which such
date or dates will be determined;
(v) the date or dates on which such interest, if any, on the
Offered Debt Securities will be payable and any regular
record dates applicable to the date or dates on which
interest will be so payable;
(vi) whether and under what circumstances Additional Amounts on
such Offered Securities or any of them will be payable and,
if so, whether and on what terms Nordstrom will have the
option to redeem such Offered Debt Securities in lieu of
paying such Additional Amounts (and the terms of such
option);
(vii) the place or places where the principal of, any premium or
interest on or any Additional Amounts with respect to such
Offered Debt Securities will be payable, any of such Offered
Debt Securities that are Registered Securities may be
surrendered for registration of transfer or exchange, and
any such Offered Debt Securities may be surrendered for
conversion or exchange;
(viii) whether any of such Offered Debt Securities are to be
redeemable at the option of Nordstrom and, if so, the date
or dates on which, the period or periods within which, the
price or prices at which and the other terms and conditions
upon which such Offered Debt Securities may be redeemed, in
whole or in part, at the option of Nordstrom;
(ix) whether Nordstrom will be obligated to redeem or purchase
any of such Offered Debt Securities pursuant to any sinking
fund or analogous provision or at the option of any holder
thereof and, if so, the date or dates on which, the period
or periods within which, the price or prices at which and
the other terms and conditions upon which such Offered Debt
Securities will be redeemed or purchased, in whole or in
part, pursuant to such obligation, and any provisions for
the remarketing of such Offered Securities so redeemed or
purchased;
(x) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered
Securities will be issuable and, if other than a
denomination of $5,000, the denominations in which any
Bearer Securities will be issuable;
(xi) whether the Offered Debt Securities will be convertible into
shares of Common Stock and/or exchangeable for other
securities and, if so, the terms and conditions upon which
such Offered Debt Securities will be so convertible or
exchangeable;
(xii) if other than the principal amount, the portion of the
principal amount (or the method by which such portion will
be determined) of such Offered Debt Securities that will be
payable upon declaration of acceleration of the Maturity
thereof;
(xiii) if other than United States dollars, the currency of
payment, including composite currencies, of the principal
of, any premium or interest on or any Additional Amounts
with respect to any of such Offered Debt Securities;
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<TABLE>
<S> <C>
(xiv) whether the principal of, any premium or interest on or any
Additional Amounts with respect to such Offered Debt
Securities will be payable, at the election of Nordstrom or
a holder, in a currency other than that in which such
Offered Debt Securities are stated to be payable and the
date or dates on which, the period or periods within which,
and the other terms and conditions upon which, such election
may be made;
(xv) any index, formula or other method used to determine the
amount of payments of principal of, any premium or interest
on or any Additional Amounts with respect to such Offered
Debt Securities;
(xvi) whether such Offered Debt Securities are to be issued in the
form of one or more global securities and, if so, the
identity of the Depositary for such global security or
securities;
(xvii) whether such Offered Debt Securities are Senior Debt
Securities or Subordinated Debt Securities and, if
Subordinated Debt Securities, the specific subordination
provisions applicable thereto;
in the case of Subordinated Debt Securities, the relative
(xviii) degree, if any, to which such Subordinated Debt Securities
of the series shall be senior to or be subordinated to other
series of Subordinated Debt Securities or other indebtedness
of Nordstrom in right of payment, whether such other series
of Subordinated Debt Securities or other indebtedness are
outstanding or not;
(xix) any deletions from, modifications of or additions to the
Events of Default or covenants of Nordstrom with respect to
such Offered Debt Securities;
(xx) whether certain provisions relating to discharge, defeasance
and covenant defeasance described below under "Discharge,
Defeasance and Covenant Defeasance" will be applicable to
such Offered Debt Securities;
(xxi) whether any of such Offered Debt Securities are to be issued
upon the exercise of warrants, and the time, manner and
place for such Offered Debt Securities to be authenticated
and delivered; and
(xxii) any other terms of such Offered Debt Securities and any
other deletions from or modifications or additions to the
applicable Indenture in respect of such Offered Debt
Securities. (Section 3.1)
</TABLE>
Unless otherwise provided in the prospectus supplement relating to any
Offered Debt Securities, principal, premium, interest and Additional Amounts, if
any, will be payable at the office or agency maintained by Nordstrom for such
purposes (initially the Corporate Trust Office of the Trustee); provided that
payment of interest on Registered Securities may be made by check mailed to the
persons entitled thereto at the addresses of such persons appearing on the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States. In the case of Registered Securities,
interest on such Debt Securities will be payable on any Interest Payment Date to
the persons in whose names the Debt Securities are registered at the close of
business on the Regular Record Date with respect to such Interest Payment Date.
All paying agents initially designated by Nordstrom for the Offered Debt
Securities will be named in the prospectus supplement relating thereto.
Nordstrom may at any time designate additional paying agents or rescind the
designation of any paying agent or approve a change in the office through which
any paying agent acts, except that Nordstrom will be required to maintain a
paying agent in each Place of Payment for the Offered Debt Securities. (Sections
3.7 and 10.2)
Unless otherwise provided in the prospectus supplement relating to any
Offered Debt Securities, the Offered Debt Securities may be presented for
transfer (duly endorsed or accompanied by a written instrument of transfer, if
so required by Nordstrom or the Security Registrar) or exchanged for other Debt
Securities of the same series (containing identical terms and provisions, in any
authorized denominations, and of a like aggregate principal amount) at the
office or agency maintained by Nordstrom for such purposes (initially the
Corporate Trust Office of the Trustee). Such transfer or exchange shall be made
without service charge, but Nordstrom may require payment of a sum
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sufficient to cover any tax or other governmental charge and any other expenses
payable in connection therewith. Nordstrom will not be required to (i) issue,
register the transfer of, or exchange, Offered Debt Securities during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Offered Debt Securities and ending at the close
of business on the day of such mailing or (ii) register the transfer of or
exchange any Offered Debt Security so selected for redemption in whole or in
part, except the unredeemed portion of any Offered Debt Security being redeemed
in part. (Section 3.5) Nordstrom has appointed the Trustee as Security
Registrar. Any transfer agent (in addition to the Security Registrar) initially
designated by Nordstrom for any Offered Debt Securities will be named in the
applicable prospectus supplement. Nordstrom may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts, except that
Nordstrom will be required to maintain a transfer agent in each Place of Payment
for the Offered Debt Securities. (Section 10.2)
Unless otherwise indicated in the applicable prospectus supplement, the
Offered Debt Securities will be issued only in fully registered form without
coupons in minimum denominations of $1,000 and any integral multiple thereof.
(Section 3.2) The Offered Debt Securities may be represented in whole or in part
by one or more global Debt Securities registered in the name of a Depositary or
its nominee and, if so represented, interests in such global Debt Security will
be shown on, and transfers thereof will be effected only through, records
maintained by the designated Depositary and its participants as described below.
Where Offered Debt Securities of any series are issued in bearer form, the
special restrictions and considerations, including special offering restrictions
and special Federal income tax considerations, applicable to such Offered Debt
Securities and to payment on and transfer and exchange of such Offered Debt
Securities will be described in the applicable prospectus supplement.
The Debt Securities may be issued as Original Issue Discount Securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their
principal amount. Special U.S. federal income tax and other considerations
applicable thereto will be described in the applicable prospectus supplement.
If the purchase price of any Offered Debt Securities is payable in one or
more foreign currencies or currency units or if any Offered Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, or any premium or interest on, or any Additional Amounts with
respect to, any Offered Debt Securities is payable in one or more foreign
currencies or currency units, the restrictions, elections, certain Federal
income tax considerations, specific terms and other information with respect to
such Offered Debt Securities and such foreign currency or currency units will be
set forth in the applicable prospectus supplement.
Nordstrom will comply with Section 14(e) under the Exchange Act, and any
other tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of Nordstrom to purchase Offered Debt Securities
at the option of the holders thereof. Any such obligation applicable to a series
of Debt Securities will be described in the applicable prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any
Offered Debt Securities, other than as described below under "-- Limitation on
Liens," the Indentures do not contain any provisions that would limit the
ability of Nordstrom to incur indebtedness or that would afford holders of Debt
Securities protection in the event of a sudden and significant decline in the
credit quality of Nordstrom or a takeover, recapitalization or highly leveraged
or similar transaction involving Nordstrom. Accordingly, Nordstrom could in the
future enter into transactions that could increase the amount of indebtedness
outstanding at that time or otherwise affect Nordstrom's capital structure or
credit rating. Reference is made to the prospectus supplement relating to the
particular series of Debt Securities offered thereby for information with
respect to any deletions from, modifications of or additions to the Events of
Defaults described below or covenants of Nordstrom contained in the
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Indentures, including any addition of a covenant or other provisions providing
event risk or similar protection.
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for shares of Common Stock, property or cash, or a
combination of any of the foregoing, will be set forth in the prospectus
supplement relating thereto. Such terms may include provisions for conversion or
exchange, either mandatory, at the option of the holder, or at the option of
Nordstrom, in which the number of shares of Common Stock to be received by the
holders of the Debt Securities would be calculated according to the factors and
at such time as set forth in the related prospectus supplement.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global Debt Securities (each, a "Global Security") that will
be deposited with, or on behalf of, a Depository identified in the prospectus
supplement relating to such series.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the prospectus supplement relating to
such series. Nordstrom anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented by
such Global Security. Such accounts shall be designated by the underwriters or
agents with respect to such Debt Securities or by Nordstrom if such Debt
Securities are offered and sold directly by Nordstrom. Ownership of beneficial
interests in a Global Security will be limited to persons that may hold
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depository or its nominee (with respect
to interests of participants) for such Global Security and on the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing Debt Securities.
Principal of, any premium and interest on, and any Additional Amounts with
respect to, Debt Securities registered in the name of a Depository or its
nominee will be made to the Depository or its nominee, as the case may be, as
the registered owner of the Global Security representing such Debt Securities.
Neither Nordstrom, the Trustee, any Paying Agent nor the Security Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Nordstrom expects that the Depository for a series of Debt Securities or
its nominee, upon receipt of any payment of principal of, premium, if any, or
interest on, or Additional Amounts with respect to such Debt Securities, will
credit immediately participants accounts with payments in
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amounts proportionate to their respective beneficial interest in the principal
amount of the Global Security for such Debt Securities as shown on the records
of such Depository or its nominee. Nordstrom also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the responsibility of such
participants.
The Indentures provide that if (i) the Depository for a series of Debt
Securities notifies Nordstrom that it is unwilling or unable to continue as
Depository or if such Depository ceases to be eligible under the applicable
Indenture and a successor depository is not appointed by Nordstrom within 90
days of written notice, (ii) Nordstrom determines that Debt Securities of a
particular series shall no longer be represented by Global Securities and
executes and delivers to the Trustee a Company Order to such effect or (iii) an
Event of Default with respect to a series of Debt Securities shall have occurred
and be continuing, the Global Securities will be exchanged for Debt Securities
of such series in definitive form of like tenor and of an equal aggregate
principal amount, in authorized denominations. Such definitive Debt Securities
shall be registered in such name or names as the Depository shall instruct the
Trustee. (Section 3.5) It is expected that such instructions may be based upon
directions received by the Depository from participants with respect to
ownership of beneficial interests in Global Securities.
LIMITATION ON LIENS
Under the Senior Indenture, Nordstrom covenants that, so long as any Senior
Debt Securities are outstanding, it will not, and will not permit any Restricted
Subsidiary (as defined below) to, create, incur, issue, assume or guarantee any
indebtedness for money borrowed ("Debt") secured by a Mortgage (as defined
below) upon any Operating Property (as defined below), or upon shares of capital
stock or Debt issued by any Restricted Subsidiary and owned by Nordstrom or any
Restricted Subsidiary, whether owned at the date of such Indenture or thereafter
acquired, without effectively providing concurrently that the outstanding Senior
Debt Securities (together with, if Nordstrom shall so determine, any other Debt
of Nordstrom or such Restricted Subsidiary then existing or thereafter created
which is not subordinate to the Senior Debt Securities) are secured equally and
ratably with or, at the option of Nordstrom, prior to such Debt so long as such
Debt shall be so secured. (Section 10.5 of the Senior Indenture)
Under the Subordinated Indenture, Nordstrom covenants that, so long as any
Senior Debt Securities are outstanding, it will not, and will not permit any
Restricted Subsidiary to, create, incur, issue, assume or guarantee any Debt
that is on a parity in right of payment with the Subordinated Debt Securities
secured by a Mortgage upon any Operating Property, or upon shares of capital
stock or Debt issued by any Restricted Subsidiary and owned by Nordstrom or any
Restricted Subsidiary, whether owned at the date of such Indenture or thereafter
acquired, without effectively providing concurrently that the outstanding
Subordinated Debt Securities are secured equally and ratably with or, at the
option of Nordstrom, prior to such Debt so long as such Debt shall be so
secured. (Section 10.5 of the Subordinated Indenture)
The foregoing restrictions shall not apply to, and there shall be excluded
from Debt in any computation under such restrictions, Debt secured by (i)
Mortgages on any property existing at the time of the acquisition thereof; (ii)
Mortgages on property of a corporation existing at the time such corporation is
merged into or consolidated with Nordstrom or a Restricted Subsidiary or at the
time of a sale, lease or other disposition of the properties of such corporation
(or a division thereof) as an entirety or substantially as an entirety to
Nordstrom or a Restricted Subsidiary, provided that any such Mortgage does not
extend to any property owned by Nordstrom or any Restricted Subsidiary
immediately prior to such merger, consolidation, sale, lease or disposition;
(iii) Mortgages on property of a corporation existing at the time such
corporation becomes a Restricted Subsidiary; (iv) Mortgages in favor of
Nordstrom or a Restricted Subsidiary; (v) Mortgages to secure all or part of the
cost of acquisition, construction, development or improvement of the underlying
property, or to
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secure Debt incurred to provide funds for any such purpose, provided that the
commitment of the creditor to extend the credit secured by any such Mortgage
shall have been obtained not later than 365 days after the later of (a) the
completion of the acquisition, construction, development or improvement of such
property, or (b) the placing in operation of such property; (vi) Mortgages in
favor of the United States of America or any State thereof, or any department,
agency or instrumentality or political subdivision thereof, to secure partial,
progress, advance or other payments; and (vii) Mortgages existing on the date of
the applicable Indenture or any extension, renewal, replacement or refunding of
any Debt secured by a Mortgage existing on the date of the applicable Indenture
or referred to in clauses (i) to (iii) or (v), provided that the principal
amount of Debt secured thereby and not otherwise authorized by clauses (i) to
(iii) or (v) shall not exceed the principal amount of Debt, plus any premium or
fee payable in connection with any such extension, renewal, replacement or
refunding, so secured at the time of such extension, renewal, replacement or
refunding. (Section 10.5)
Notwithstanding the restrictions described above, Nordstrom and its
Restricted Subsidiaries may create, incur, issue, assume or guarantee Debt
secured by Mortgages without equally and ratably securing the Debt Securities
if, at the time of such creation, incurrence, issuance, assumption or guarantee,
after giving effect thereto and to the retirement of any Debt which is
concurrently being retired, the aggregate amount of all outstanding Debt secured
by Mortgages which would otherwise be subject to such restrictions (other than
any Debt secured by Mortgages permitted as described in clauses (i) through
(vii) of the immediately preceding paragraph) does not exceed the greater of (i)
15% of Consolidated Net Assets (as defined below) and (ii) $150 million.
(Section 10.5)
"Consolidated Net Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any indebtedness for money
borrowed having a maturity of less than 12 months from the date of the most
recent consolidated balance sheet of Nordstrom but which by its terms is
renewable or extendable beyond 12 months from such date at the option of the
borrower), and (ii) all investments in Subsidiaries other than Restricted
Subsidiaries, all as set forth on the most recent consolidated balance sheet of
Nordstrom and computed in accordance with generally accepted accounting
principles.
"Mortgage" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security arrangement of any kind or nature whatsoever on
or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Operating Property" means any real property or equipment located within
the United States and owned by, or leased to, Nordstrom or any of its
Subsidiaries that has a net book value (after deduction of accumulated
depreciation) in excess of 1.0% of Consolidated Net Assets.
"Restricted Subsidiary" means any Subsidiary of Nordstrom that owns any
Operating Property.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by Nordstrom or by one or more
Subsidiaries thereof, or by Nordstrom and one or more Subsidiaries. (Section
1.1)
CONSOLIDATION, AMALGAMATION, MERGER AND SALE OF ASSETS
Each Indenture provides that Nordstrom may not (i) consolidate or
amalgamate with or merge into any Person or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
Person, or (ii) permit any Person to consolidate or amalgamate with or merge
into
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Nordstrom, or convey, transfer or lease its properties and assets as an entirety
or substantially as an entirety to Nordstrom, unless (a) in the case of (i)
above, such Person is organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia, and shall expressly
assume, by supplemental indenture satisfactory in form to the Trustee, the due
and punctual payment of the principal of and premium, if any, and interest on
all of the Debt Securities issued thereunder, and the performance of Nordstrom's
obligations under such Indenture and the Debt Securities issued thereunder; (b)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of Nordstrom or a Subsidiary as a
result of such transaction as having been incurred by Nordstrom or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which after notice or lapse of time or both would become an Event of Default,
shall have happened and be continuing; and (c) certain other conditions are met.
(Section 8.1)
EVENTS OF DEFAULT
Each of the following events will constitute an Event of Default under the
applicable Indenture with respect to any series of Debt Securities issued
thereunder (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body): (i) default in the payment of any
interest on any Debt Security of such series, or any Additional Amounts payable
with respect thereto, when such interest becomes or such Additional Amounts
become due and payable, and continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of or any premium on any Debt
Security of such series, or any Additional Amounts payable with respect thereto,
when such principal or premium becomes or such Additional Amounts become due and
payable either at maturity, upon any redemption, by declaration of acceleration
or otherwise; (iii) default in the deposit of any sinking fund payment, when and
as due by the terms of any Debt Security of such series; (iv) default in the
performance, or breach, of any covenant or warranty of Nordstrom contained in
the applicable Indenture for the benefit of such series or in the Debt
Securities of such series, and the continuance of such default or breach for a
period of 60 days after there has been given written notice as provided in such
Indenture; (v) certain events in bankruptcy, insolvency or reorganization of
Nordstrom; and (vi) any other Event of Default provided in or pursuant to the
applicable Indenture with respect to Debt Securities of such series. (Section
5.1)
If an Event of Default with respect to the Debt Securities of any series
(other than an Event of Default described in (v) of the preceding paragraph)
occurs and is continuing, either the Trustee or the holders of at least 25% in
principal amount of the outstanding Debt Securities of such series by written
notice as provided in the applicable Indenture may declare the principal amount
(or such lesser amount as may be provided for in the Debt Securities of such
series) of all outstanding Debt Securities of such series to be due and payable
immediately. At any time after a declaration of acceleration has been made, but
before a judgment or decree for payment of money has been obtained by the
Trustee, and subject to applicable law and certain other provisions of the
applicable Indenture, the holders of a majority in aggregate principal amount of
the Debt Securities of such series may, under certain circumstances, rescind and
annul such acceleration. An Event of Default described in (v) of the preceding
paragraph shall cause the principal amount and accrued interest (or such lesser
amount as provided for in the Debt Securities of such series) to become
immediately due and payable without any declaration or other act by the Trustee
or any holder. (Section 5.2)
Each Indenture provides that, within 90 days after the occurrence of any
event which is, or after notice or lapse of time or both would become, an Event
of Default thereunder with respect to the Debt Securities of any series (a
"default"), the Trustee shall transmit, in the manner set forth in such
Indenture, notice of such default to the holders of the Debt Securities of such
series unless such default has been cured or waived; provided, however, that
except in the case of a default in the payment of principal of, or premium, if
any, or interest, if any, on, or Additional Amounts or any sinking
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fund or purchase fund installment with respect to, any Debt Security of such
series, the Trustee may withhold such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the best interest of the holders of Debt Securities of such
series. (Section 6.2)
If an Event of Default occurs and is continuing with respect to the Debt
Securities of any series, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of Debt Securities of such
series by all appropriate judicial proceedings. (Section 5.3) Each Indenture
provides that, subject to the duty of the Trustee during any default to act with
the required standard of care, the Trustee will be under no obligation to
exercise any of its rights or powers under such Indenture at the request or
direction of any of the holders of Debt Securities, unless such holders shall
have offered to the Trustee reasonable indemnity. (Section 6.1) Subject to such
provisions for the indemnification of the Trustee, and subject to applicable law
and certain other provisions of the applicable Indenture, the holders of a
majority in aggregate principal amount of the outstanding Debt Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of such
series. (Section 5.12)
MODIFICATION AND WAIVER
Each Indenture may be modified or amended by Nordstrom and the Trustee with
the consent of the holders of not less than a majority in aggregate principal
amount of the outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
change the Stated Maturity of the principal of, or any premium or installment of
interest on, or any Additional Amounts with respect to, any Debt Security, (b)
reduce the principal amount of, or the rate (or modify the calculation of such
rate) of interest on, or any Additional Amounts with respect to, or any premium
payable upon the redemption of, any Debt Security, (c) change the obligation of
Nordstrom to pay Additional Amounts with respect to any Debt Security or reduce
the amount of the principal of an Original Issue Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity thereof or
the amount thereof provable in bankruptcy, (d) change the redemption provisions
of any Debt Security or adversely affect the right of repayment at the option of
any holder of any Debt Security, (e) change the place of payment or the coin or
currency in which the principal of, any premium or interest on or any Additional
Amounts with respect to any Debt Security is payable, (f) impair the right to
institute suit for the enforcement of any payment on or after the Stated
Maturity of any Debt Security (or, in the case of redemption, on or after the
Redemption Date or, in the case of repayment at the option of any holder, on or
after the date for repayment), (g) reduce the percentage in principal amount of
the outstanding Debt Securities, the consent of whose holders is required in
order to take certain actions, (h) reduce the requirements for quorum or voting
by holders of Debt Securities in Section 15.4 of each Indenture, (i) modify any
of the provisions in the applicable Indenture regarding the waiver of past
defaults and the waiver of certain covenants by the holders of Debt Securities
except to increase any percentage vote required or to provide that certain other
provisions of such Indenture cannot be modified or waived without the consent of
the holder of each Debt Security affected thereby, (j) make any change that
adversely affects the right to convert or exchange any Debt Security into or for
shares of Common Stock of Nordstrom or other Debt Securities in accordance with
its terms, or (k) modify any of the above provisions. (Section 9.2)
The holders of at least a majority in aggregate principal amount of the
Debt Securities of any series may, on behalf of the holders of all Debt
Securities of such series, waive compliance by Nordstrom with certain
restrictive provisions of the applicable Indenture. (Section 10.7) The holders
of not less than a majority in aggregate principal amount of the outstanding
Debt Securities of any series may, on behalf of the holders of all Debt
Securities of such series, waive any past default and its
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consequences under the applicable Indenture with respect to the Debt Securities
of such series, except a default (a) in the payment of principal of (or premium,
if any), any interest on or any Additional Amounts with respect to Debt
Securities of such series or (b) in respect of a covenant or provision of the
applicable Indenture that cannot be modified or amended without the consent of
the holder of each Debt Security of any series. (Section 5.13)
Under each Indenture, Nordstrom is required to furnish the Trustee annually
a statement as to performance by Nordstrom of certain of its obligations under
such Indenture and as to any default in such performance. Nordstrom is also
required to deliver to the Trustee, within five days after occurrence thereof,
written notice of any Event of Default or any event which after notice or lapse
of time or both would constitute an Event of Default. (Section 10.8)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Nordstrom may discharge certain obligations to holders of any series of
Debt Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
depositing with the Trustee, in trust, funds in U.S. dollars or in the Foreign
Currency in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities with respect to principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the Maturity thereof, as the case
may be. (Section 4.1)
Each Indenture provides that, unless the provisions of Section 4.2 thereof
are made inapplicable to the Debt Securities of or within any series pursuant to
Section 3.1 thereof, Nordstrom may elect either (a) to defease and be discharged
from any and all obligations with respect to such Debt Securities (except for,
among other things, the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of taxation, assessment or governmental charge with
respect to payments on such Debt Securities and other obligations to register
the transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency with respect to such Debt Securities and to hold moneys for payment in
trust) ("defeasance") or (b) to be released from its obligations with respect to
such Debt Securities under certain covenants as described in the applicable
prospectus supplement, and any omission to comply with such obligations shall
not constitute a default or an Event of Default with respect to such Debt
Securities ("covenant defeasance"). Defeasance or covenant defeasance, as the
case may be, shall be conditioned upon the irrevocable deposit by Nordstrom with
the Trustee, in trust, of an amount in U.S. dollars or in the Foreign Currency
in which such Debt Securities are payable at Stated Maturity, or Government
Obligations (as defined below), or both, applicable to such Debt Securities
which through the scheduled payment of principal and interest in accordance with
their terms will provide money in an amount sufficient to pay the principal of
(and premium, if any) and interest on such Debt Securities on the scheduled due
dates therefor. (Section 4.2)
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the applicable Indenture or any
other material agreement or instrument to which Nordstrom is a party or by which
it is bound, (ii) no Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the Debt
Securities to be defeased shall have occurred and be continuing on the date of
establishment of such a trust and, with respect to defeasance only, at any time
during the period ending on the 123rd day after such date and (iii) Nordstrom
has delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred, and such Opinion of Counsel, in the case of defeasance, must refer to
and be based upon a letter ruling of the
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Internal Revenue Service received by Nordstrom, a Revenue Ruling published by
the Internal Revenue Service or a change in applicable U.S. federal income tax
law occurring after the date of the applicable Indenture. (Section 4.2)
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the euro, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments. (Section 1.1)
"Government Obligations" means Debt Securities which are (i) direct
obligations of the United States of America or the government or the governments
in the confederation which issued the Foreign Currency in which the Debt
Securities of a particular series are payable, for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America or such government or governments which issued the Foreign Currency in
which the Debt Securities of such series are payable, the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government or governments, which, in the
case of clauses (i) and (ii), are not callable or redeemable at the option of
the issuer or issuers thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
any other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian with respect to the Government Obligation
or the specific payment of interest on or principal of or any other amount with
respect to the Government Obligation evidenced by such depository receipt.
(Section 1.1)
If after Nordstrom has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the holder of a Debt Security of such series is entitled to, and
does, elect pursuant to Section 3.1 of the applicable Indenture or the terms of
such Debt Security to receive payment in a currency other than that in which
such deposit has been made in respect of such Debt Security, or (b) a Conversion
Event (as defined below) occurs in respect of the Foreign Currency in which such
deposit has been made, the indebtedness represented by such Debt Security shall
be deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any) and interest, if any, on such
Debt Security as such Debt Security becomes due out of the proceeds yielded by
converting the amount or other properties so deposited in respect of such Debt
Security into the currency in which such Debt Security becomes payable as a
result of such election or such Conversion Event based on (x) in the case of
payments made pursuant to clause (a) above, the applicable market exchange rate
for such currency in effect on the second business day prior to such payment
date, or (y) with respect to a Conversion Event, the applicable market exchange
rate for such Foreign Currency in effect (as nearly as feasible) at the time of
the Conversion Event. (Section 4.2)
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign Currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community or
(ii) any currency unit or composite currency for the purposes for which it was
established. All payments of principal of (and premium, if any) and interest on
any Security that are payable in a Foreign Currency that ceases to be used by
the government or confederation of issuance shall be made in U.S. dollars.
(Section 1.1)
In the event Nordstrom effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect
to any covenant as to which there has been covenant defeasance, the amount in
such Foreign Currency in which such Debt Securities are payable, and Government
Obligations on deposit with the Trustee, will be sufficient to pay amounts due
on such
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Debt Securities at the time of the Stated Maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such Event of Default. However, Nordstrom would remain liable to
make payment of such amounts due at the time of acceleration.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Indebtedness. (Section 16.1 of the Subordinated Indenture)
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to Nordstrom or to its creditors, as such, or to
its assets, or (b) any liquidation, dissolution or other winding up of
Nordstrom, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of Nordstrom, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in cash, before
the holders of Subordinated Debt Securities are entitle to receive any payment
on account of principal of, or any premium or interest on, or any Additional
Amount with respect to, Subordinated Debt Securities, and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any payment or distribution of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of Nordstrom being subordinated to the payment of
Subordinated Debt Securities, which may be payable or deliverable in respect of
the Subordinated Debt Securities in any such case, proceeding, dissolution,
liquidation or other winding up event. (Section 16.3 of the Subordinated
Indenture)
By reason of such subordination, in the event of liquidation or insolvency
of Nordstrom, holders of Senior Indebtedness and holders of other obligations of
Nordstrom that are not subordinated to Senior Indebtedness may recover more,
ratably, than the holders of the Subordinated Debt Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt Securities outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts due thereon before the holders of the Subordinated Debt Securities will
be entitled to receive any payment upon the principal of, or any premium or
interest on, or any Additional Amounts with respect to, the Subordinated Debt
Securities. (Section 16.4 of the Subordinated Indenture)
No payment of principal (including redemption and sinking fund payments) of
or any premium or interest on or any Additional Amounts with respect to the
Subordinated Debt Securities may be made (i) if any Senior Indebtedness of
Nordstrom is not paid when due and any applicable grace period with respect to
such default has ended and such default has not been cured or waived or ceased
to exist, or (ii) if the maturity of any Senior Indebtedness of Nordstrom has
been accelerated because of a default. (Section 16.2 of the Subordinated
Indenture)
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt Securities, which may include indebtedness that is senior
to the Subordinated Debt Securities, but subordinate to other obligations of
Nordstrom. The Senior Debt Securities constitute Senior Indebtedness under the
Subordinated Indenture.
The term "Senior Indebtedness" means (i) the principal and premium, if any,
and unpaid interest in respect of (A) indebtedness of Nordstrom for money
borrowed and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments issued by Nordstrom, (ii) all capital lease
obligations of Nordstrom, (iii) all obligations of Nordstrom issued or assumed
as the deferred purchase price of property, all conditional sale obligations of
Nordstrom and all obligations of Nordstrom under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of Nordstrom for the reimbursement on any letter
of
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credit, banker's acceptance, security purchase facility or similar credit
transaction, (v) obligations associated with derivative products such as
interest rate and currency exchange contracts, foreign exchange contracts,
commodity contracts, and similar arrangements, (vi) all obligations of the types
referred to in clauses (i) through (v) above of other persons for the payment of
which Nordstrom is responsible or liable as an obligor, guarantor or otherwise
and (vii) all obligations of the types referred to in clauses (i) through (vi)
above of other persons secured by any lien on any property or asset of Nordstrom
(whether or not such obligation is assumed by Nordstrom), except, in each case,
for (1) any such indebtedness or obligation that is by its terms subordinated to
or pari passu with the Subordinated Debt Securities, (2) any indebtedness of
Nordstrom to a wholly owned Subsidiary of Nordstrom, (3) interest accruing after
the filing of a petition initiating certain events of bankruptcy or insolvency
unless such interest is an allowed claim enforceable against Nordstrom in a
proceeding under federal or state bankruptcy laws and (4) trade payables. Such
Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to
the benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness. (Sections 1.1
and 16.8 of the Subordinated Indenture)
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the applicable prospectus supplement.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made or instruments entered into and, in each case performed in said state.
(Section 1.13)
RELATIONSHIP WITH THE TRUSTEE
The Trustee under the Indenture, Norwest Bank Colorado, National
Association, also acts as trustee in connection with an indenture dated as of
March 11, 1998 relating to $300,000,000 aggregate principal amount of
Nordstrom's Senior Debentures due 2028. In addition, the Trustee is also the
trustee under two indentures covering outstanding medium-term Notes of Nordstrom
Credit, Inc., a subsidiary of Nordstrom.
DESCRIPTION OF DEBT WARRANTS
Nordstrom may issue, together with other securities or separately, Debt
Warrants for the purchase of Debt Securities. The Debt Warrants are to be issued
under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be entered
into between Nordstrom and a bank or trust company, as Debt Warrant Agent (the
"Debt Warrant Agent"), all as set forth in the prospectus supplement relating to
Debt Warrants in respect of which this prospectus is being delivered. The Debt
Warrant Agent will act solely as an agent of Nordstrom in connection with the
Debt Warrants of such series and will not assume any obligations or relationship
of agency or trust for or with any holders or beneficial owners of Debt
Warrants. A copy of the form of Debt Warrant Agreement, including the form of
Warrant Certificates representing the Debt Warrants (the "Debt Warrant
Certificates"), reflecting the alternative provisions to be included in the Debt
Warrant Agreements that will be entered into with respect to particular
offerings of Debt Warrants, will be filed in an amendment to the registration
statement of which this prospectus is a part or filed in a Current Report on
Form 8-K and incorporated by reference in the registration statement of which
this prospectus is a part. The following summaries of certain provisions that
will be included in the Debt Warrant Agreements and the Debt Warrant
Certificates do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the applicable Debt
Warrant Agreement and the Debt Warrant Certificates, respectively, to be filed
in an amendment to the registration statement of which this prospectus is a part
or to be filed in a Current Report on Form 8-K and incorporated by
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reference in the registration statement of which this prospectus is a part,
including the definitions therein of certain capitalized terms not defined
herein.
GENERAL
Reference is made to the prospectus supplement for the terms of Debt
Warrants in respect of which this prospectus is being delivered, the Debt
Warrant Agreement relating to such Debt Warrants and the Debt Warrant
Certificates representing such Debt Warrants, including the following:
- the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon the exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants;
- the designation and terms of any related Debt Securities with which such
Debt Warrants are issued and the number of such Debt Warrants issued with
each such Debt Security;
- the date, if any, on and after which such Debt Warrants and the related
Debt Securities will be separately transferable;
- the principal amount of Debt Securities purchasable upon exercise of each
Debt Warrant and the price at which such principal amount of Debt
Securities may be purchased upon such exercise;
- the date on which the right to exercise such Debt Warrants shall commence
and the date on which such right shall expire (the "Expiration Date");
- if the Debt Securities purchasable upon exercise of such Debt Warrants
are original issue discount Debt Securities, a discussion of federal
income tax considerations applicable thereto; and
- whether the Debt Warrants represented by the Debt Warrant Certificates
will be issued in registered or bearer form, and, if registered, where
they may be transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the prospectus supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise and will not be entitled to
payments of principal of (and premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each case
be set forth in, or to be determinable as set forth in the prospectus supplement
relating to the Debt Warrants offered thereby. Debt Warrants may be exercised at
any time up to the close of business on the Expiration Date set forth in the
applicable prospectus supplement. After the close of business on the Expiration
Date, unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the prospectus supplement
relating to the Debt Warrants in respect of which this prospectus is being
delivered. Upon receipt of payment and the Debt Warrant Certificate properly
completed and duly executed at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the prospectus supplement, Nordstrom
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Debt Warrants represented by such Debt Warrant
Certificate are exercised, a new Debt Warrant Certificate will be issued for the
remaining amount of Debt Warrants.
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DESCRIPTION OF COMMON STOCK
Nordstrom may issue common stock upon conversion of any convertible debt
securities issued under this prospectus.
The following summaries do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, Nordstrom's Articles of
Incorporation as amended and By-Laws. The Articles of Incorporation and By-Laws
are incorporated by reference as exhibits.
The total amount of the authorized capital stock of Nordstrom consists of
250,000,000 shares, no par value, of common stock, of which 142,069,092 shares
of Common Stock were issued and outstanding as of November 30,1998.
The holders of outstanding shares of the Common Stock are entitled to
receive dividends at such times and in such amounts as the Board of Directors
may from time to time determine. The shares of Common Stock are neither
redeemable nor convertible, and the holders thereof have no preemptive or
subscription rights to purchase any securities of Nordstrom. Each outstanding
share of Common Stock is entitled to one vote on all matters submitted to a vote
of shareholders. There is no cumulative voting. Upon any liquidation,
dissolution or winding up of Nordstrom, whether voluntary or involuntary,
remaining net assets, if any, of Nordstrom will be distributed pro rata to the
holders of the Common Stock.
DESCRIPTION OF STOCK WARRANTS
Nordstrom may issue, together with other securities or separately, Stock
Warrants for the purchase of Common Stock. The Stock Warrants are to be issued
under Stock Warrant Agreements (each a "Stock Warrant Agreement") to be entered
into between Nordstrom and a bank or trust company, as Stock Warrant Agent (the
"Stock Warrant Agent"), all as set forth in the prospectus supplement relating
to Stock Warrants in respect of which this prospectus is being delivered. The
Stock Warrant Agent will act solely as an agent of Nordstrom in connection with
the Stock Warrants of such series and will not assume any obligations or
relationship of agent or trust for or with any holders or beneficial owners of
Stock Warrants. A copy of the form of Stock Warrant Agreement, including the
form of Warrant Certificates representing the Stock Warrants (the "Stock Warrant
Certificates") reflecting the provisions to be included in the Stock Warrant
Agreement that will be entered into with respect to particular offerings of
Stock Warrants, will be filed in an amendment to the registration statement of
which this prospectus is a part or filed in a Current Report on Form 8-K and
incorporated by reference in the registration statement of which this prospectus
is a part. The following summaries of certain provisions that will be included
in the Stock Warrant Agreements and the Stock Warrant Certificates,
respectively, to be filed in an amendment to the registration statement of which
this prospectus is a part or to be filed in a Current Report on Form 8-K and
incorporated by reference in the registration statement of which this prospectus
is a part, including the definitions therein of certain capitalized terms not
defined herein.
GENERAL
Reference is made to the prospectus supplement for the terms of Stock
Warrants in respect of which this prospectus is being delivered, the Stock
Warrant Agreement relating to such Stock Warrants and the Stock Warrant
Certificates representing such Stock Warrants, including the following:
- the offering price of such Stock Warrants, if any;
- the procedures and conditions relating to the exercise of such Stock
Warrants;
- the number of shares of Common Stock purchasable upon exercise of each
Stock Warrant and the initial price at which such shares may be purchased
upon exercise;
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- the date on which the right to exercise such Stock Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date");
- a discussion of Federal income tax considerations applicable to the
exercise of Stock Warrants;
- call provisions of such Stock Warrants, if any; and
- other terms of the Stock Warrants.
The shares of Common Stock issuable upon the exercise of the Stock Warrants
will, when issued in accordance with the Stock Warrant Agreement, be fully paid
and nonassessable.
Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable upon
such exercise, and will not be entitled to any dividend payments on the Common
Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS
Each Stock Warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the prospectus supplement relating
to the Stock Warrants offered thereby. Unless otherwise specified in the
applicable prospectus supplement, Stock Warrants may be exercised at any time up
to the close of business on the Expiration Date set forth in the applicable
prospectus supplement. After the close of business on the Expiration Date,
unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the prospectus supplement
relating to the Stock Warrants in respect of which this prospectus is being
delivered. Upon receipt of payment and the Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Stock Warrant
Agent or any other office indicated in the prospectus supplement, Nordstrom
will, as soon as practicable, forward a certificate representing the number of
shares of Common Stock purchasable upon such exercise. If less than all of the
Stock Warrants represented by such Stock Warrant Certificate are exercised, a
new Stock Warrant Certificate will be issued for the remaining amount of Stock
Warrants.
ANTIDILUTION PROVISIONS
Unless otherwise specified in the applicable prospectus supplement, the
exercise price payable and the number of shares purchasable upon the exercise of
each Stock Warrant will be subject to adjustment in certain events, including
(1) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock; (2) the issuance
of rights, warrants or options to all holders of Common Stock entitling the
holders thereof to purchase Common Stock for an aggregate consideration per
share less than the current market price per share of the Common Stock; or (3)
any distribution by Nordstrom to the holders of its Common Stock of evidences of
indebtedness of Nordstrom or of assets (excluding cash dividends or
distributions payable out of capital surplus and dividends and distributions
referred to in (1) above). No fractional shares will be issued upon exercise of
Stock Warrants, but Nordstrom will pay the cash value of any fractional shares
otherwise issuable.
DESCRIPTION OF CURRENCY WARRANTS
Nordstrom may issue, together with Debt Securities or Debt Warrants or
separately, Currency Warrants either in the form of Currency Put Warrants
entitling the holders thereof to receive from Nordstrom the Cash Settlement
Value in U.S. dollars of the right to sell a specified amount of a specified
foreign currency or currency units for a specified amount of U.S. dollars, or in
the form of Currency Call Warrants entitling the holders thereof to receive from
Nordstrom the Cash Settlement Value in U.S. dollars of the right to purchase a
specified amount of a specific foreign currency or
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currency units for a specified amount of U.S. dollars. The spot exchange rate of
the applicable Base Currency, upon exercise, as compared to the U.S. dollar,
will determine whether the Currency Warrants have a Cash Settlement Value on any
given day prior to their expiration.
The Currency Warrants are to be issued under a Currency Warrant Agreement
to be entered into between Nordstrom and a bank or trust company, as Currency
Warrant Agent (the "Currency Warrant Agent"), all as set forth in the prospectus
supplement. The Currency Warrant Agent will act solely as an agent of Nordstrom
in connection with the Currency Warrants of such series and will not assume any
obligations or relationship of agent or trust for or with any holders or
beneficial owners of Currency Warrants. A copy of the form of Currency Warrant
Agreement, including the forms of global Warrant Certificates representing the
Currency Put Warrants and Currency Call Warrants (the "Currency Warrant
Certificates"), reflecting the provisions to be included in the Currency Warrant
Agreement that will be entered into with respect to particular offerings of
Currency Warrants, will be filed in an amendment to the registration statement
of which this prospectus is a part or filed in a Current Report on Form 8-K and
incorporated by reference in the registration statement of which this prospectus
is a part. The description of the Currency Warrants contained herein and the
following summaries of certain provisions that will be included in the Currency
Warrant Agreements and the Currency Warrant Certificates do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the applicable Currency Warrant Agreement and the
Currency Warrant Certificates, respectively, to be filed in an amendment to the
registration statement of which this prospectus is a part or to be filed in a
Current Report on Form 8-K and incorporated by reference in the registration
statement of which this prospectus is a part, including the definitions therein
of certain capitalized terms not defined herein.
GENERAL
Reference is made to the prospectus supplement for the terms of Currency
Warrants in respect of which this prospectus is being delivered, the Currency
Warrant Agreement relating to such Currency Warrants and the Currency Warrant
Certificates representing such Currency Warrants, including the following:
- whether such Currency Warrants will be Currency Put Warrants, Currency
Call Warrants, or both;
- the formula for determining the Cash Settlement Value, if any, of each
Currency Warrant;
- the procedures and conditions relating to the exercise of such Currency
Warrant;
- the circumstances which will cause the Currency Warrants to be deemed to
be automatically exercised;
- any minimum number of Currency Warrants which must be exercised at any
one time, other than upon automatic exercise; and
- the date on which the right to exercise such Currency Warrants will
commence and the date on which such right will expire (the "Expiration
Date").
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Except as may otherwise be provided in the applicable prospectus
supplement, the Currency Warrants will be issued in the form of global Currency
Warrant Certificates, registered in the name of a depositary or its nominee.
Holders will not be entitled to receive definitive certificates representing
Currency Warrants. A holder's ownership of a Currency Warrant will be recorded
on or through the records of the brokerage firm or other entity that maintains
such holder's account. In turn, the total number of Currency Warrants held by an
individual brokerage firm for its clients will be maintained on the records of
the depositary in the name of such brokerage firm or its agent. Transfer of
ownership of any Currency Warrant will be effected only through the selling
holder's brokerage firm.
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EXERCISE OF CURRENCY WARRANTS
Each Currency Warrant will entitle the holder to receive the Cash
Settlement Value of such Currency Warrant on the applicable Exercise Date, in
each case as such terms will be defined in the applicable prospectus supplement.
If not exercised prior to 3:00 P.M., New York City time, on the third New York
Business Day preceding the Expiration Date, Currency Warrants will be deemed
automatically exercised on the Expiration Date.
PLAN OF DISTRIBUTION
Nordstrom may sell Offered Securities in any one or more of the following
ways from time to time: (i) to or through underwriters; (ii) through dealers;
(iii) through agents, or (iv) directly to purchasers. The prospectus supplement
with respect to the Offered Securities will set forth the terms of the offering
of the Offered Securities, including the name or names of any underwriters,
dealers or agents; the purchase price of the Offered Securities and the proceeds
to Nordstrom from such sale; any underwriting discounts and commissions or
agency fees and other items constituting underwriters' or agents' compensation;
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchange on which such Offered
Securities may be listed. Any initial public offering price, discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
If Offered Securities are sold by means of an underwritten offering,
Nordstrom will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the names of
the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transaction, including commissions, discounts
and any other compensation of the underwriters and dealers, if any, will be set
forth in the prospectus supplement which will be used by the underwriters to
make resales of the Offered Securities in respect of which this prospectus is
delivered to the public. If underwriters are utilized in the sale of the Offered
Securities in respect of which this prospectus is delivered, the Offered
Securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined by
the underwriter at the time of sale. Offered Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by the managing underwriters. If any underwriter or
underwriters are utilized in the sale of the Offered Securities, unless
otherwise indicated in the prospectus supplement, the underwriting agreement
will provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of Offered
Securities will be obligated to purchase all such Offered Securities of a series
if any are purchased.
Nordstrom may grant to the underwriters options to purchase additional
Offered Securities, to cover over-allotments, if any, at the public offering
price (with additional underwriting discounts or commissions), as may be set
forth in the prospectus supplement relating thereto. If Nordstrom grants any
over-allotment option, the terms of such over-allotment option will be set forth
in the prospectus supplement relating to such Offered Securities.
If a dealer is utilized in the sales of Offered Securities in respect of
which this prospectus is delivered, Nordstrom will sell such Offered Securities
to the dealer as principal. The dealer may then resell such Offered Securities
to the public at varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter, as such term is
defined in the Securities Act of 1933, as amended (the "Securities Act"), of the
Offered Securities so offered and
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sold. The name of the dealer and the terms of the transaction will be set forth
in the prospectus supplement relating thereto.
Offers to purchase Offered Securities may be solicited by agents designated
by Nordstrom from time to time. Any such agent involved in the offer or sale of
the Offered Securities in respect of which this prospectus is delivered will be
named, and any commissions payable by Nordstrom to such agent will be set forth,
in the applicable prospectus supplement. Unless otherwise indicated in such
prospectus supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment. Any such agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the Offered
Securities so offered and sold.
Offers to purchase Offered Securities may be solicited directly by
Nordstrom and the sale thereof may be made by Nordstrom directly to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the prospectus supplement relating
thereto.
Underwriters, dealers and agents may be entitled under relevant agreements
entered into with Nordstrom to indemnification by Nordstrom against certain
civil liabilities, including liabilities under the Securities Act that may arise
from any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact in this prospectus, any
supplement or amendment hereto, or in the registration statement of which this
prospectus forms a part, or to contribution with respect to payments which the
agents, underwriters or dealers may be required to make in respect thereof.
If so indicated in the prospectus supplement, Nordstrom will authorize
underwriters or other persons acting as Nordstrom's agents to solicit offers by
certain institutions to purchase Offered Securities from Nordstrom pursuant to
contracts providing for payments and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by Nordstrom. The obligations of any purchaser under any such contract
will be subject to the condition that the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
Each series of Offered Securities will be a new issue and, other than
shares of the Common Stock, which are listed on the NASDAQ National Market, will
have no established trading market. Nordstrom may elect to list any series of
Offered Securities on an exchange, and in the case of shares of Common Stock, on
any additional exchange, but, unless otherwise specified in the applicable
prospectus supplement, Nordstrom shall not be obligated to do so. No assurance
can be given as to the liquidity of the trading market for any of the Offered
Securities.
Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, Nordstrom and its subsidiaries in
the ordinary course of business.
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LEGAL MATTERS
Lane Powell Spears Lubersky LLP, Seattle, Washington will pass upon the
validity of the Offered Securities for Nordstrom. D. Wayne Gittinger, a partner
in that firm, is also a director of Nordstrom. At December 18, 1998 members of
the firm beneficially owned, directly or indirectly, a total of approximately
10,600,000 shares of Common Stock.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from Nordstrom's Annual Report on
Form 10-K for the year ended January 31, 1998, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
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No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus supplement and the
accompanying prospectus. You must not rely on any unauthorized information or
representations. This prospectus supplement and the accompanying prospectus are
an offer to sell only the Notes offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus supplement and the accompanying prospectus are current only as of
their dates.
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TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Nordstrom............................ S-2
Recent Developments.................. S-2
Use of Proceeds...................... S-3
Selected Consolidated Financial
Data............................... S-4
Description of the Notes............. S-5
Underwriting......................... S-8
Legal Matters........................ S-9
Prospectus
Where You Can Find Additional
Information........................ 2
Nordstrom, Inc. ..................... 2
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 3
General Description of the Offered
Securities......................... 4
Description of the Debt Securities... 4
Description of the Debt Warrants..... 16
Description of Common Stock.......... 18
Description of Stock Warrants........ 18
Description of Currency Warrants..... 19
Plan of Distribution................. 21
Legal Matters........................ 23
Experts.............................. 23
</TABLE>
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$300,000,000
[NORDSTROM LOGO]
8.95% Senior Notes
due October 15, 2005
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PROSPECTUS SUPPLEMENT
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BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON
BANC ONE CAPITAL MARKETS, INC.
LOOP CAPITAL MARKETS, LLC
MURIEL SIEBERT & CO., LLC
REDWOOD SECURITIES GROUP, INC.
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