<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
NORDSTROM. INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
Nordstrom logo
April 10, 2000
DEAR SHAREHOLDERS:
On behalf of the Board of Directors and management, I cordially invite you to
attend the Annual Meeting of Shareholders on Tuesday, May 16, 2000, at 11:00
a.m., Pacific Daylight Time, at the Westin Hotel, Grand Ballroom, 1900 Fifth
Avenue, Seattle, Washington, 98101.
In addition to the matters described in the Notice of Annual Meeting and Proxy
Statement, there will be a report on the progress of the Company and an
opportunity to ask questions of general interest to you as a Shareholder.
YOUR VOTE IS VERY IMPORTANT. Therefore, whether or not you plan to attend the
meeting in person, please sign and return the enclosed Proxy in the envelope
provided. If you attend the meeting and desire to vote in person, you may do so
even though you have previously sent your Proxy.
I hope you will be able to join us and we look forward to seeing you in Seattle.
Sincerely yours,
/s/ JOHN J. WHITACRE
John J. Whitacre
Chairman of the Board of Directors
and Chief Executive Officer
<PAGE> 3
NORDSTROM, INC.
1617 SIXTH AVENUE
SEATTLE, WASHINGTON
98101-1742
NOTICE OF ANNUAL
MEETING OF
SHAREHOLDERS To the Shareholders of
Nordstrom, Inc.:
The Annual Meeting of Shareholders of Nordstrom, Inc. will
be held on Tuesday, May 16, 2000, at 11:00 a.m., Pacific
Daylight Time, at the Westin Hotel, Grand Ballroom, 1900
Fifth Avenue, Seattle, Washington, 98101 for the following
purposes:
1. To elect 10 directors to hold office until the next
Annual Meeting of Shareholders and until their successors
are duly elected and qualified;
2. To approve the Company's Employee Stock Purchase Plan;
3. To approve an amendment to the Company's 1997 Stock
Option Plan;
4. To ratify the appointment of auditors;
5. To vote on a Shareholder proposal relating to vendor
standards compliance mechanisms; and
6. To transact such other business as may properly come
before the meeting and any adjournment thereof.
Holders of shares of Common Stock of record at the close
of business on March 20, 2000 are entitled to notice of,
and to vote at, the meeting.
Shareholders are cordially invited to attend the meeting
in person.
By order of the Board of Directors,
/s/ N. CLAIRE STACK
N. Claire Stack
Secretary
Seattle, Washington
April 10, 2000
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING, YOU ARE URGED TO SIGN AND DATE THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE
PROVIDED.
1
<PAGE> 4
PROXY STATEMENT
APPROXIMATE
MAILING DATE:
APRIL 10, 2000 This Proxy Statement is furnished to the Shareholders of
Nordstrom, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors for use
at the Annual Meeting of Shareholders to be held on May
16, 2000 and any adjournment thereof. If the enclosed
Proxy is executed and returned, it will be voted in
accordance with the instructions given, but may be revoked
at any time insofar as it has not been exercised by
notifying the Secretary of the Company in writing (such
notification to be directed to the Company's offices at
1617 Sixth Avenue, Seattle, Washington, 98101-1742). Each
Proxy will be voted for Proposals 1, 2, 3 and 4, and
against Proposal 5, and may be voted on such other matters
as may properly come before the meeting if no contrary
instruction is indicated on the Proxy.
There were 130,802,550 shares of Common Stock, the only
security of the Company entitled to vote at the meeting,
outstanding as of March 20, 2000, which is the record date
for the Annual Meeting of Shareholders. Shareholders are
entitled to one vote for each share of Common Stock held
of record at the close of business on March 20, 2000.
Under Washington law and the Company's Articles of
Incorporation, a quorum consisting of a majority of the
shares eligible to vote must be represented in person or
by proxy to elect directors and to transact any other
business that may properly come before the meeting. For
election of directors, the nominees elected will be those
receiving the greatest number of votes cast by the shares
entitled to vote, up to the number of directors to be
elected. Any action other than a vote for a nominee will
have the effect of voting against the nominee. The
Employee Stock Purchase Plan and the amendment to the
Company's 1997 Stock Option Plan will be approved, the
appointment of auditors will be ratified, and the
Shareholder proposal will pass if the votes cast in favor
of the respective proposal exceed the votes cast against
it. Abstentions and nonvotes by brokers will have no
effect since such actions do not represent votes cast by
Shareholders.
2
<PAGE> 5
<TABLE>
<S> <C>
SECURITY OWNERSHIP OF The following table sets forth, as of March 20, 2000, the
CERTAIN BENEFICIAL number of shares of Common Stock held by beneficial owners
OWNERS AND of more than five percent of the Company's Common Stock, by
MANAGEMENT directors and nominees, by the executive officers named in
the Summary Compensation Table on page 8, and by all
directors and executive officers of the Company as a group:
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent
Name of Beneficial Owner Ownership of Class
<S> <C> <C>
- ----------------------------------------------------------------------------------------
ELMER AND KATHARINE NORDSTROM 12,476,552(a) 9.54%
FAMILY INTERESTS, L.P.
c/o 1617 Sixth Avenue
Seattle, Washington 98101-1742
BRUCE A. NORDSTROM 10,789,717(b)(c) 8.25%
c/o 1617 Sixth Avenue
Seattle, Washington 98101-1742
D. WAYNE GITTINGER 10,478,924(b)(d) 8.02%
1420 Fifth Avenue, Suite 4100
Seattle, Washington 98101
DODGE & COX 6,665,940(e) 5.09%
One Sansome St., 35th Floor
San Francisco, California 94101
JOHN N. NORDSTROM 3,915,294(b)(f) 2.99%
BLAKE W. NORDSTROM 973,069(g) *
JOHN A. MCMILLAN 267,147 *
MICHAEL A. STEIN 205,501(h) *
JOHN J. WHITACRE 118,640(i) *
ROBERT J. MIDDLEMAS 53,142(j) *
GAIL A. COTTLE 38,953(k) *
WILLIAM D. RUCKELSHAUS 15,327 *
ALFRED E. OSBORNE, JR. 8,177(l) *
ANN D. MCLAUGHLIN 5,327 *
BRUCE G. WILLISON 4,815(m) *
ENRIQUE HERNANDEZ, JR. 3,249(n) *
Directors and executive officers as a group (29 persons) 45,546,928(o) 34.82%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Does not exceed 1% of the Company's outstanding Common Stock.
(a) The general partners of this partnership are Katharine J. Nordstrom, The
Elected Marital Trust under the Will of Elmer J. Nordstrom (John N. Nordstrom,
trustee), the James F. Nordstrom Interests, L.P., and the John N. Nordstrom
Interests, L.P. The general partners of the James F. Nordstrom Interests, L.P.
are Sally A. Nordstrom, the Estate of James F. Nordstrom (Sally A. Nordstrom,
personal representative), J. Daniel Nordstrom and William E. Nordstrom, and the
general partners of the John N. Nordstrom Interests, L.P. are John N. Nordstrom,
Sally B. Nordstrom, and James A. Nordstrom. Each of these entities and
individuals are deemed to beneficially own the shares held by the Elmer and
Katharine Nord-
3
<PAGE> 6
strom Family Interests, L.P. Each of the general partners disclaim beneficial
ownership of the shares held by the Elmer and Katharine Nordstrom Family
Interests, L.P. that exceed the greater of their proportionate interest in their
respective profits or capital account in the partnerships.
(b) Does not include 160,000 shares held by a corporation, of which the director
or his spouse owns a one-eighth beneficial interest.
(c) Includes 78,388 shares held by his wife individually; and 4,235,280 shares
held by trusts, of which he is a trustee and beneficiary. Does not include
3,494,964 shares held by trusts, of which he is co-trustee.
(d) Includes 6,932,146 shares held by his wife individually; 707 shares held by
her as a participant in the Company's 401(k) Plan; 777,600 shares held by a
trust, of which she is a trustee and beneficiary; and 2,750,760 shares held by a
trust, of which she is the beneficiary. Does not include 206,896 shares held by
trusts of which he is a trustee.
(e) Based on an amended Schedule 13G filed pursuant to the Securities Exchange
Act of 1934 (the "1934 Act"), which indicates that Dodge & Cox has sole
dispositive power with respect to all of these shares, sole voting power with
respect to 6,027,040 shares, and shared voting power with respect to 55,900
shares.
(f) Includes 161,610 shares held by his wife; 4,012 shares held by trusts, of
which he is the trustee; and 2,780,000 shares held by the John N. Nordstrom
Interests, L.P., of which he is a general partner. John N. Nordstrom disclaims
beneficial ownership of the shares held by the John N. Nordstrom Interests, L.P.
that exceed the greater of his proportionate interest in his profits or capital
account in the partnership. Does not include any of the shares held by the Elmer
and Katharine Nordstrom Family Interests, L.P., of which he is deemed a
beneficial owner.
(g) Includes 18,312 shares held by his wife individually; 21,881 shares held by
trusts, of which he is a trustee; 80,994 shares which may be acquired under the
1987 and 1997 Stock Option Plans; and 1,442 shares held by him in the Company's
401(k) Plan.
(h) Includes 144,000 shares of restricted stock; and 37,466 shares, which may be
acquired under the 1997 Stock Option Plan.
(i) Includes 107,280 shares, which may be acquired under the 1987 and 1997 Stock
Option Plans; and 7,358 shares held by him as a participant in the Company's
401(k) Plan.
(j) Includes 48,746 shares, which may be acquired under the 1987 and 1997 Stock
Option Plans; and 4,394 shares held by him as a participant in the Company's
401(k) Plan.
(k) Includes 38,951 shares, which may be acquired under the 1987 and 1997 Stock
Option Plans.
(l) Includes 600 shares held by his wife; 150 shares held by his wife for
benefit of child; and 400 shares held by a corporation, of which he is the sole
shareholder.
(m) Represents shares held by a trust, of which he and his spouse are trustees
and beneficiaries.
(n) Includes 2,000 shares held by a trust, of which he and his spouse are
trustees and beneficiaries.
(o) Includes the 12,476,552 shares held by the Elmer and Katharine Nordstrom
Family Interests, L.P. Also includes the 1,330,000 shares held by the James F.
Nordstrom Interests, L.P. and the 2,780,000 shares held by the John N. Nordstrom
Interests, L.P.
The directors and executive officers shown in the table disclaim beneficial
interest in any shares held solely as custodian or trustee, and all shares held
by their spouses and immediate family members.
4
<PAGE> 7
PROPOSAL 1:
ELECTION OF DIRECTORS Ten directors will be elected at the Annual Meeting of
Shareholders, each to hold office until the next Annual
Meeting of Shareholders and until a successor has been
duly elected and qualified. Unless otherwise instructed by
the Shareholder, the persons named in the enclosed Proxy
intend to vote for the election of the persons listed in
this Proxy Statement. All of the nominees are currently
directors of the Company. If any nominee becomes
unavailable for any reason or should a vacancy occur
before the election, which events are not anticipated, the
Proxy may be voted for a person to be selected by the
Board of Directors of the Company.
NOMINEES
Information related to the director nominees is set forth
below:
<TABLE>
<CAPTION>
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- -------------------------------------------------------------------------------------------------------
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
D. WAYNE GITTINGER Partner in the law firm of Lane Powell Spears Lubersky 1971
Age 67(a)(b) LLP
ENRIQUE HERNANDEZ, JR. Chairman and Chief Executive Officer of Inter-Con 1997
Age 44(c) Security Systems, Inc., a California-based worldwide
security and facility support services provider;
co-founder and principal partner, Interspan
Communications, a television broadcasting company
serving Spanish-speaking audiences
ANN D. MCLAUGHLIN Chairman of the Aspen Institute, Washington, D.C. and 1992
Age 58(d) Aspen, Colorado, an international, nonprofit,
educational and public policy organization dedicated
to serving leaders throughout the world (formerly
Vice Chairman of the Aspen Institute; President of
the Federal City Council; President and Chief
Executive Officer of New American Schools
Development Corporation; Visiting Fellow of the
Urban Institute)
JOHN A. MCMILLAN Retired (formerly Co-Chairman of the Board of 1966
Age 68(e) Directors of the Company)
BRUCE A. NORDSTROM Retired (formerly Co-Chairman of the Board of 1966
Age 66(b) Directors of the Company)
JOHN N. NORDSTROM Retired (formerly Co-Chairman of the Board of 1966
Age 62(b) Directors of the Company)
ALFRED E. OSBORNE, JR. Director of the Harold Price Center for 1987
Age 55(f) Entrepreneurial Studies and Associate Professor of
Business Economics, The Anderson School at UCLA
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
WILLIAM D. RUCKELSHAUS A Principal in Madrona Investment Group, L.L.C., a 1985
Age 67(g) Washington-based private investment firm (formerly
Chairman and Chief Executive Officer of
Browning-Ferris Industries, Inc.)
JOHN J. WHITACRE Chairman of the Board of Directors and Chief Executive 1995
Age 47 Officer of the Company (formerly Co-Chairman of the
Board of Directors of the Company)
BRUCE G. WILLISON Dean of the Anderson School at UCLA, formerly 1998
Age 51(h) President and Chief Operating Officer of H.F.
Ahmanson & Company, a California-headquartered
thrift holding company and Home Savings of America,
a full-service consumer bank, also headquartered in
California. H.F. Ahmanson was the parent company
Home Savings of America.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(a) Mr. Gittinger is a partner in the law firm of Lane Powell Spears Lubersky
LLP, which rendered legal services to the Company during the 1999 fiscal year.
(b) Bruce A. Nordstrom is a brother-in-law of D. Wayne Gittinger and a cousin of
John N. Nordstrom. Mr. Bruce A. Nordstrom's sons are Blake W. Nordstrom, Erik B.
Nordstrom, and Peter E. Nordstrom, all of whom are Executive Vice Presidents of
the Company. Mr. John N. Nordstrom's son is James A. Nordstrom, a former
Co-President of the Company, and nephews are J. Daniel Nordstrom, President of
Nordstrom.com, LLC, and William E. Nordstrom, Executive Vice President of the
Company. J. Daniel and William E. Nordstrom are brothers.
(c) Mr. Hernandez is also a director of California Healthcare Foundation, ICSS
Holding Corp., McDonald's Corporation, and Washington Mutual, Inc.
(d) Ms. McLaughlin, a former U.S. Secretary of Labor, is also a director of AMR
Corporation, Donna Karan International, Fannie Mae, General Motors Corporation,
Harman International Industries, Inc., Host Marriott Corporation, Kellogg
Company, Microsoft Corporation, and Vulcan Materials Company.
(e) Mr. McMillan is also a director of Plenum Communications.
(f) Dr. Osborne is also a director of The Times Mirror Company, and K2, Inc.,
and is also a trustee of the WM Group of Funds, and First Pacific Advisors New
Income and Capital Funds, and an independent general partner of Technology
Funding Venture Partners V.
(g) Mr. Ruckelshaus is also a director of Coinstar, Inc., Cummins Engine
Company, Monsanto Company, Solutia Inc., and Weyerhaeuser Company. He was also a
director of the Company from 1978 to 1983.
(h) Mr. Willison is also a director of Housing and Commercial Bank, Korea, the
Los Angeles Urban League, the United Way of Greater Los Angeles, and the Los
Angeles Sports Council.
The Board of Directors recommends a vote FOR each of the nominees listed in the
table.
6
<PAGE> 9
BOARD OF DIRECTORS
AND COMMITTEES The Board of Directors maintains an Audit Committee, a
Compensation and Stock Option Committee, and a Corporate
Governance and Nominating Committee. These committees do
not have formal meeting schedules, but are required to
meet at least once each year. During the past year, there
were seven meetings of the Board of Directors, four
meetings of the Audit Committee, six meetings of the
Compensation and Stock Option Committee, and five meetings
of the Corporate Governance and Nominating Committee.
Enrique Hernandez, Jr. attended seventy percent of the
aggregate of the meetings of the Board of Directors and
the meetings of the committees of the Board on which he
served.
Current members of the Audit Committee are Ann D.
McLaughlin, Chair, Enrique Hernandez, Jr., Alfred E.
Osborne, Jr., William D. Ruckelshaus, Elizabeth Crownhart
Vaughan, and Bruce G. Willison. The Audit Committee is
responsible for recommending the Company's independent
auditors. This Committee meets periodically with the
independent auditors, as well as with management and the
internal auditors, to review accounting, auditing,
internal accounting controls, and financial reporting
matters. The independent auditors and the internal
auditors also meet privately with the Audit Committee.
Current members of the Compensation and Stock Option
Committee are William D. Ruckelshaus, Chair, Enrique
Hernandez, Jr., Ann D. McLaughlin, Alfred E. Osborne, Jr.,
and Elizabeth Crownhart Vaughan. The Compensation and
Stock Option Committee is responsible for determining the
overall compensation levels of certain of the Company's
executive officers and administering the Company's stock
option plans.
Current members of the Corporate Governance and Nominating
Committee are D. Wayne Gittinger, Chair, Ann D.
McLaughlin, Alfred E. Osborne, Jr., William D.
Ruckelshaus, and Elizabeth Crownhart Vaughan. The
Corporate Governance and Nominating Committee is primarily
responsible for recommending director nominees to the
Company's Board of Directors. The Committee will consider
recommendations by Shareholders for vacancies on the
Board. Suggestions may be submitted to the Company's
Secretary.
7
<PAGE> 10
COMPENSATION OF
EXECUTIVE OFFICERS IN
THE YEAR ENDED
JANUARY 31, 2000 SUMMARY COMPENSATION TABLE
The following table summarizes compensation paid or
accrued by the Company for services rendered by the
Chairman of the Board of Directors and Chief Executive
Officer, and four Executive Vice Presidents of the Company
for the periods indicated:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
- -----------------------------------------------------------------------------------------------------------------
Value of
Restricted
Fiscal Other Annual Stock Awards/ Number
Name and Principal Year Compensation Performance of Stock All Other
Position (b) Salary Bonus (c) Shares(d) Options Compensation(e)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JOHN J. WHITACRE 1999 $625,000 $0 $18,855 $731,243 55,450 $13,719
CHAIRMAN OF THE BOARD 1998 $490,000 $805,000 $20,500 $562,513 145,776 $14,933
OF DIRECTORS AND CHIEF 1997 $365,000 $245,791 $19,187 $0 8,760 $14,373
EXECUTIVE OFFICER
- -----------------------------------------------------------------------------------------------------------------
GAIL A. COTTLE 1999 $268,333 $201,582 $23,362 $151,882 11,517 $8,994
EXECUTIVE 1998 $249,730 $167,128 $16,442 $146,247 38,578 $14,018
VICE PRESIDENT 1997 $240,000 $135,600 $15,997 $0 6,006 $9,444
- -----------------------------------------------------------------------------------------------------------------
ROBERT J. MIDDLEMAS 1999 $255,000 $194,116 $80,729 $146,263 11,090 $12,383
EXECUTIVE 1998 $224,682 $303,124 $7,386 $129,369 35,280 $13,507
VICE PRESIDENT 1997 $194,750 $268,865 $8,468 $0 4,790 $9,836
- -----------------------------------------------------------------------------------------------------------------
BLAKE W. NORDSTROM 1999 $383,333 $0 $23,235 $449,990 34,123 $12,464
EXECUTIVE 1998 $277,500 $414,000 $19,703 $337,502 91,466 $13,404
VICE PRESIDENT(A) 1997 $165,000 $138,500 $68,875 $0 4,128 $12,064
- -----------------------------------------------------------------------------------------------------------------
MICHAEL A. STEIN 1999 $496,667 $0 $346,665 $562,507 42,654 $456,581
EXECUTIVE VICE 1998(f) $147,399 $465,193 $61,695 $5,100,006(g) 131,171 $0
PRESIDENT AND CHIEF
FINANCIAL OFFICER
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Mr. Nordstrom was a Co-President of the Company until February 16, 2000.
(b) The fiscal year of the Company ends January 31 of the following year.
(c) Other Annual Compensation for the 1999 fiscal year includes automobile
allowance, parking, personal use of airplane services, and reimbursements for
relocation tax, regular tax, medical, and financial planning.
(d) These amounts represent performance share units granted to the named
executive officers on February 26, 1999 (valued as of that date) that vest on
February 26, 2002 if the Company's performance exceeds that of the S&P Retail
Store Composite set forth in the performance graph on page 16 on that date.
These units valued as of January 31, 2000 would be as follows:
<TABLE>
<S> <C> <C>
John J. Whitacre -- $406,626
Gail A. Cottle -- $ 84,458
Robert J. Middlemas -- $ 81,334
Blake W. Nordstrom -- $250,228
Michael A. Stein -- $312,796
</TABLE>
8
<PAGE> 11
(e) All Other Compensation for the 1999 fiscal year includes the following:
Profit Sharing Plan benefit: Mr. J. J. Whitacre: $7,196; Ms. G. A. Cottle:
$7,227; Mr. R. J. Middlemas: $7,182; Mr. B. W. Nordstrom: $7,173; Mr. M. A.
Stein: $5,796.
401(k) Plan benefit: Mr. J. J. Whitacre: $4,800; Ms. G. A. Cottle: $1,083;
Mr. R. J. Middlemas: $4,800; Mr. B. W. Nordstrom: $4,800; Mr. M. A. Stein:
$4,800.
Premiums on excess term life insurance: Mr. J. J. Whitacre: $1,723; Ms. G.
A. Cottle: $684; Mr. R. J. Middlemas: $401; Mr. B. W. Nordstrom: $491; Mr.
M. A. Stein: $2,181.
Relocation Expenses: Mr. M. A. Stein: $443,701.
(f) Mr. M. A. Stein commenced employment with the Company on October 15, 1998.
(g) This amount includes 180,000 shares of restricted stock granted on October
15, 1998. These shares vest in five equal installments beginning on October 15,
1999. Vesting is accelerated if Mr. M. A. Stein's employment is terminated by
the Company without cause, or if he resigns following either a change in control
of the Company or a diminution of his duties, title or authority, or upon
termination due to death or disability. Mr. Stein is entitled to receive
dividends on these shares if and as declared by the Company's Board of
Directors. This amount also includes 3,784 performance share units granted on
October 15, 1998 (valued as of that date) that vest on February 26, 2001 if the
Company's performance exceeds that of the S&P Retail Store Composite set forth
in the Performance Graph on page 16 on that date. As of January 31, 2000, Mr.
Stein held 147,784 shares of restricted stock and performance share units,
(subject to the vesting schedules set forth above), the value of which on that
date was $3,251,248.
9
<PAGE> 12
OPTION GRANTS IN THE 1999 FISCAL YEAR
The following table sets forth information concerning
option grants during the 1999 fiscal year to the named
executive officers:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Potential Realizable
Percent Value at Assumed
of Total Annual Rates of Stock
Options Price Appreciation for
Number Granted to Exercise or Option Terms
of Options Employees in Base Price -----------------------
Name Granted(a)(b) Fiscal Year Per Share Expiration Date 5% 10%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JOHN J. WHITACRE 55,450 1.89% $39.56 Feb 25, 2009 $1,379,632 $3,496,258
- -------------------------------------------------------------------------------------------------------------
GAIL A. COTTLE 11,517 0.39% $39.56 Feb 25, 2009 $286,550 $726,175
- -------------------------------------------------------------------------------------------------------------
ROBERT J. MIDDLEMAS 11,090 0.38% $39.56 Feb 25, 2009 $275,831 $698,954
- -------------------------------------------------------------------------------------------------------------
BLAKE W. NORDSTROM 34,123 1.17% $39.56 Feb 25, 2009 $849,002 $2,151,538
- -------------------------------------------------------------------------------------------------------------
MICHAEL A. STEIN 42,654 1.46% $39.56 Feb 25, 2009 $1,061,259 $2,689,439
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) Options are granted at the fair market value of the Company's Common Stock
on the date of the grant. To the extent not already exercisable, options
generally become exercisable upon a sale of the Company or substantially all of
its assets.
(b) These options vest and become exercisable in four equal annual installments
beginning February 25, 2000.
OPTION EXERCISES AND YEAR END VALUE TABLE
The following table sets forth information concerning
option exercises and the value of options held at January
31, 2000 by the named executive officers:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dollar Value of
Number of Unexercised Unexercised, in-the-Money
Number of Options Held at Options held at
Shares Dollar January 31, 2000 January 31, 2000(a)
Acquired on Value -------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JOHN J. WHITACRE 0 $0 77,626 168,054 $48,856 $2,005
- ------------------------------------------------------------------------------------------------------------
GAIL A. COTTLE 24,953 $381,281 31,437 38,237 $71,346 $1,374
- ------------------------------------------------------------------------------------------------------------
ROBERT J. MIDDLEMAS 0 $0 41,970 34,216 $61,826 $938
- ------------------------------------------------------------------------------------------------------------
BLAKE W. NORDSTROM 3,184 $32,238 65,177 100,800 $140,014 $944
- ------------------------------------------------------------------------------------------------------------
MICHAEL A. STEIN 0 $0 26,802 147,023 n/a n/a
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) Dollar value is based on the market value of the Company's Common Stock on
the date of exercise or at January 31, 2000, as the case may be, minus the
exercise price.
10
<PAGE> 13
PENSION PLAN TABLE
The following table sets forth information concerning
estimated annual benefits payable to each of the named
executive officers upon their retirement based upon
indicated years of service (without reduction for any
Profit Sharing Retirement Plan benefits):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years of Service
Average Annual ----------------------------------------------------
Compensation(a) 15 20 25 30 35
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $ 45,000 $ 60,000 $ 75,000 $ 75,000 $ 75,000
$150,000 $ 54,000 $ 72,000 $ 90,000 $ 90,000 $ 90,000
$175,000 $ 63,000 $ 84,000 $105,000 $105,000 $105,000
$200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
$225,000 $ 81,000 $108,000 $135,000 $135,000 $135,000
$250,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
$300,000 $108,000 $144,000 $180,000 $180,000 $180,000
$400,000 $144,000 $192,000 $240,000 $240,000 $240,000
$450,000 $162,000 $216,000 $270,000 $270,000 $270,000
$500,000 $180,000 $240,000 $300,000 $300,000 $300,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) The benefits are payable pursuant to the Nordstrom Supplemental Executive
Retirement Plan, which covers officers of the Company and its subsidiaries,
including the named executive officers. The benefits are unfunded and
limited to a maximum of 60% of the monthly average compensation (based
solely on the yearly amounts set forth in the salary and bonus columns of
the Summary Compensation Table) less the actuarial equivalent of any monthly
benefits payable under the Nordstrom Profit Sharing Retirement Plan. The
normal annual retirement benefit provided by the Nordstrom Supplemental
Executive Retirement Plan is 2.4% of the monthly average compensation for
the highest thirty-six months measured over the final sixty months of
employment or the entire period of service after age 50, multiplied by the
number of years of service with the Company, up to a maximum of twenty-five
years. From this value is subtracted the monthly annuity that could be
purchased at retirement using the lump sum value of the Profit Sharing and
401(k) accounts funded by Company contributions. The remaining amount is the
monthly retirement benefit payable under the Nordstrom Supplemental
Executive Retirement Plan.
(b) The credited years of service to the Company, which may be more or less than
actual years worked, for the executive officers are as follows:
<TABLE>
<S> <C>
John J. Whitacre -- 23 years
Gail A. Cottle -- 30 years
Robert J. Middlemas -- 20 years
Blake W. Nordstrom -- 18 years
Michael A. Stein -- 6 years
</TABLE>
11
<PAGE> 14
COMPENSATION AND
STOCK OPTION
COMMITTEE
REPORT ON THE
1999 FISCAL YEAR The Compensation and Stock Option Committee is comprised
of five directors, and is responsible for setting
compensation levels for the Chairman of the Board of
Directors and Chief Executive Officer, and the Executive
Vice Presidents of the Company. The Committee also
consults with the Chairman with respect to the
compensation and benefits for other officers and with
respect to the benefits for certain other employees of
the Company.
COMPENSATION PHILOSOPHY
The Company bases the various components of its
executive compensation program on differing measures of
Company performance and Shareholder value. The overall
goal of the Committee is to develop compensation
programs and policies that are consistent with and
linked to the Company's strategic business objectives,
including management's value-based approach to managing
the Company. The program is designed to:
- play a critical role in attracting and retaining
those executives deemed most able to further its
goal of aligning the Company's interests with
creating value for Shareholders; and
- reward executives for medium and long-term
Company performance and value created for
Shareholders as measured by a mix of factors,
including increases in Company stock price, sales
increases, earnings, and other
performance-related value drivers, which will or
should increase Shareholder return.
COMPENSATION COMPONENTS
The Company's executive compensation program is based on
three components, each of which furthers a differing
objective, but all of which together are intended to
serve the Company's overall compensation philosophy and
further the Company's value-based management approach by
more closely aligning the Company's compensation program
with increasing value for Shareholders.
BASE SALARY. Base salary adjustments are made annually
based on the Committee's view of how the management team
and the respective individual contributes to the overall
performance of the Company. Overall performance of the
Company is measured by a number of factors including the
Company's earnings, its performance versus its retail
competitors, its performance versus budget, its
improvement in gross margins, and the Committee's
assessment of management skills. None of these factors
is given greater weight than any other factor. The
Committee also reviews the median base salaries for
competitors in the specialty retailing field, including
companies listed in Standard & Poor's Retail Store
Composite referenced in the Performance Graph on page
16.
ANNUAL BONUS INCENTIVES. Annual bonus incentives are
intended to reflect the Company's belief that
management's contribution to medium and long-term
Company performance comes, in part, from improvement in
the Company's economic profit, earnings, earnings per
share, division sales, inventory turn, and gross
margins. Annual bonus incentives for the Chairman, the
Executive Vice Presidents who were formerly
Co-Presidents, and the Executive Vice President and
Chief Financial Officer for 1999 were based solely on
specified economic profit target amounts. Annual bonus
incentives for the other Executive Vice Presidents have
been based on various combinations of economic profit,
earnings, division sales, inventory
12
<PAGE> 15
turn, gross margin, and expense control targets. Going
forward, the bonus incentives for the Executive Vice
Presidents who were formerly Co-Presidents will be based
on various combinations of business unit earnings,
sales, inventory turn, gross margin, and expense control
targets. The amount of the respective bonuses has been
based on the achievement of these targets, which, in
turn, relate to pre-established percentages of the
respective executive's base salary. Under this plan,
executive officers have not received any bonus
incentives until the applicable minimum specified
performance target was achieved. Bonuses for fiscal year
1999 were paid only to those executive officers who were
subject to business unit earnings, sales, inventory
turn, gross margin, and expense control targets.
LONG-TERM INCENTIVES. Stock Options. The 1987 Stock
Option Plan expired in August 1997. The 1987 Plan
authorized granting options to key employees or key
managerial personnel of the Company and its
subsidiaries. A number of options granted under this
Plan remain outstanding. The 1997 Stock Option Plan,
adopted for a term of 10 years beginning May 20, 1997,
authorizes granting options to employees of the Company
and its subsidiaries. Both the 1987 and 1997 Stock
Option Plans are administered by the Committee.
The option incentive component of the total compensation
package is intended to retain and motivate executives to
increase total return to Shareholders. Stock options
must be granted at the fair market value of the
Company's Common Stock and only have value if the
Company's stock price increases from the time of the
award. Vesting of options occurs only during employment
with the Company or a subsidiary (and after retirement
for those who do not thereafter compete with the
Company) upon each anniversary of the award unless
vesting of the options is subject to performance goals
established by the Committee.
The number of stock options granted to the executive
officers named in the Summary Compensation Table is
currently determined by the Committee pursuant to a
formula without reference to the number of stock options
granted previously. Pursuant to the formula, the number
of option shares granted has corresponded to the number
of underlying Company shares that would produce a value
ranging from 56% to 113% of the participant's yearly
salary, calculated based on the Black-Scholes formula.
Stock options are currently granted to those executives
in February of each year. Since the formula is keyed to
salary, the performance factors discussed in the Base
Salary paragraph also would apply to this compensation
component. The Committee reserves the right to change or
eliminate the formula at any time.
Performance Share Units. The 1997 Stock Option Plan also
authorizes granting performance share units to employees
of the Company and its subsidiaries. Performance share
units entitle the grantee to receive shares of the
Company's Common Stock (or cash in lieu thereof or
deferral into the Executive Deferred Compensation Plan
as stock units) upon the achievement of pre-established
performance goals related to comparative shareholder
return.
Restricted Stock. Finally, the 1997 Stock Option Plan
authorizes granting shares of restricted stock to
employees of the Company and its subsidiaries.
13
<PAGE> 16
Retirement. The Nordstrom Profit Sharing Retirement Plan
covers all regular employees of the Company and its
subsidiaries, including the executive officers named in
the Summary Compensation Table. The Board of Directors
determines annually an amount to be contributed by the
Company to the Nordstrom Profit Sharing Retirement Plan
and the Nordstrom 401(k) Plan (formerly, the Employee
Deferral Retirement Plan). Allocation of the Company's
contribution to each participant's account was changed
after the 1999 calendar year. For calendar 1999, the
allocation was pro rata, based on one unit of credit for
each year of service and one unit of credit for each
$100 of compensation up to the IRS limitations.
Beginning in calendar 2000, the Company's contribution
will be allocated based on a participant's years of
service with the Company, with participants receiving an
allocation of 0 to 3% of compensation based upon the
Company's performance and years of service. For purposes
of these allocations, compensation is limited to
$160,000 for the 1999 calendar year ($170,000 for 2000).
Savings. Pursuant to the Nordstrom 401(k) Plan,
employees may elect to have the Company pay from 1% to
10% (15% as of January 1, 2000) of the employee's
compensation, up to a maximum of $10,000 for the 1999
calendar year ($10,500 for 2000), to the 401(k) Plan
instead of paying that amount to the employee. During
calendar 1999, the Company matched 50% of the employee's
contribution up to 6% of the employee's compensation.
Beginning in calendar 2000, the Company will match 100%
of the employee's contribution up to 4% of the
employee's compensation. Monies in the account are
invested at the direction of the employee among one or
more of 10 funds, one of which consists of Common Stock
of the Company, or through a brokerage account feature
maintained by the Plan's Trustee. Distributions are made
for both plans, in accordance with each plan's
provisions, at normal retirement upon reaching the age
of 60 or earlier termination of employment, and for
terminal illness, disability or hardship.
The Nordstrom Supplemental Executive Retirement Plan
provides retirement benefits to certain executives of
the Company. This Plan is described in the note to the
Pension Plan Table on page 11.
COMPENSATION OF THE CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
The base salary for the Chairman is determined by the
Committee and is based on overall Company performance.
That performance is measured by a number of factors
including the Company's earnings, real or perceived
retail environment and competitive conditions,
performance versus budget, growth in sales, improvement
in gross margins, and the Committee's assessment of
management skills. None of these factors is given
greater weight than any other factor. The base salary of
the Chairman was increased from $500,000 in 1998 to
$650,000 in 1999, reflecting positive business results
in fiscal year 1998. The annual bonus incentive for the
Chairman was based solely on economic profit targets.
Those targets were not met and the Chairman did not
receive any bonus during fiscal year 1999. The Chairman
received stock options during the 1999 fiscal year
pursuant to the formula used for all other executive
officers named in the Summary Compensation Table as
previously described.
14
<PAGE> 17
ADDITIONAL INFORMATION
The tables under "Compensation of Executive Officers in
the Year Ended January 31, 2000" may be found earlier in
this Proxy Statement and reflect the decisions covered
by the foregoing discussion.
Internal Revenue Code Section 162(m) disallows a tax
deduction to public corporations for compensation over
$1,000,000 paid to the Company's Chief Executive Officer
and four other most highly paid officers as of the end
of any fiscal year. The statute exempts qualifying
"performance-based compensation" from the deduction
limit if certain requirements are met. The Committee
currently intends to structure performance-based
compensation, including stock option grants and annual
bonuses to executive officers who may be subject to
Section 162(m), in a manner that satisfies those
requirements. The Committee reserves the authority to
award non-deductible compensation in circumstances that
are in the best interests of the Shareholders and the
Company.
March 13, 2000 COMPENSATION AND STOCK OPTION COMMITTEE
William D. Ruckelshaus, Chair
Enrique Hernandez, Jr.
Ann D. McLaughlin
Alfred E. Osborne, Jr.
Elizabeth Crownhart Vaughan
15
<PAGE> 18
STOCK PRICE PERFORMANCE PERFORMANCE GRAPH
The following graph compares for each of the last five
fiscal years, ending January 31, 2000, the cumulative
total return of Company Common Stock, Standard & Poor's
500 Index, and Standard & Poor's Retail Store Composite.
The cumulative total return of Company Common Stock
assumes $100 invested on January 31, 1995 in Nordstrom,
Inc. Common Stock and assumes reinvestment of dividends.
<TABLE>
<CAPTION>
S&P RETAIL COMPOSITE S&P 500 COMPOSITE
NORDSTROM, INC. INDEX INDEX
--------------- -------------------- -----------------
<S> <C> <C> <C>
1995 100 100 100
1996 98 106 135
1997 94 125 167
1998 130 184 208
1999 215 299 272
2000 115 298 296
</TABLE>
COMPENSATION OF
DIRECTORS Employee directors of the Company are not paid any fees
for serving as members of the Board or any Board
committee. Non-employee directors are paid a yearly
retainer of $15,000, a fee of $1,000 for each Board
meeting attended, a fee of $1,000 for each committee
meeting attended, and reasonable traveling expenses.
Pursuant to the 1993 Non-Employee Director Stock
Incentive Plan, as amended during 1999, immediately
following each Annual Meeting of Shareholders,
non-employee directors also receive that number of
shares of Company Common Stock having a fair market
value of $20,000, plus a $8,000 cash award to offset tax
obligations attributable to the stock award.
16
<PAGE> 19
CERTAIN RELATIONSHIPS
AND RELATED
TRANSACTIONS During the 1999 fiscal year, the Company leased an
airplane from JBW Aircraft Leasing Company, Inc.
("JBW"), of which John N. Nordstrom, Bruce A. Nordstrom,
and D. Wayne Gittinger are the sole shareholders. During
the 1999 fiscal year, the Company made lease payments to
JBW of $73,700. Also during the 1999 fiscal year, JBW
made payments to the Company of $55,055 for services
rendered.
In addition, the Company chartered an airplane from JFN,
Inc., the shareholders of which are Sally A. Nordstrom
and the Estate of James F. Nordstrom (Sally A.
Nordstrom, personal representative). During the 1999
fiscal year, the net amount of payments made by the
Company to JFN, Inc. was $74,504. The Company believes
the lease and charter rates and the terms of these
arrangements are more favorable than those generally
available to the Company from other commercial charters.
Finally, JW, Inc., of which John N. Nordstrom and D.
Wayne Gittinger are the sole shareholders, made payments
to the Company of $28,887 for services rendered.
On November 1, 1998, Darren R. Jackson, a Vice President
of the Company, executed a promissory note in favor of
the Company evidencing a loan in the original amount of
$150,000 (with interest at the rate of 5.12%) to
facilitate his purchase of a home. The maximum amount of
indebtedness during the 1999 fiscal year was $159,253.
As of March 20, 2000, the amount of indebtedness was
$125,099.
On June 18, 1999, Michael A. Stein, Executive Vice
President and Chief Financial Officer, executed a
Promissory note in favor of the Company evidencing a
loan in the original amount of $1,292,968 (with interest
at the rate of 7.75%) to facilitate his purchase of a
home. The maximum amount of indebtedness during the 1999
fiscal year was $1,326,369. As of March 20, 2000, the
amount of indebtedness was $1,068,530.
On July 6, 1999, Martha S. Wikstrom, an Executive Vice
President of the Company, executed a promissory note in
favor of the Company evidencing a loan in the original
amount of $100,000 (with interest at the rate of 7.75%)
to facilitate her purchase of a home. The maximum amount
of indebtedness during the 1999 fiscal year was
$104,521. As of March 20, 2000, the amount of
indebtedness was $105,562.
D. Wayne Gittinger's stepson was employed by the Company
during the 1999 fiscal year at a total compensation of
$67,750.
Bruce A. Nordstrom's sons, Erik B. Nordstrom and Peter
E. Nordstrom, were employed by the Company during the
1999 fiscal year at a total compensation of $417,578 and
$413,517, respectively.
John N. Nordstrom's son, James A. Nordstrom, was
employed by the Company during the 1999 fiscal year at a
total compensation of $459,692.
J. Daniel Nordstrom was employed by the Company during
the 1999 fiscal year at a total compensation of
$395,051.
William E. Nordstrom was employed by the Company during
the 1999 fiscal year at a total compensation of
$486,589.
17
<PAGE> 20
The brother of J. Daniel Nordstrom and William E.
Nordstrom was employed by the Company during the 1999
fiscal year at a total compensation of $103,604.
The spouse of Jim O'Neal, an Executive Vice President of
the Company, was employed by the Company during the 1999
fiscal year at a total compensation of $184,374.
PROPOSAL 2:
APPROVAL OF
EMPLOYEE STOCK
PURCHASE PLAN GENERAL
On November 16, 1999, the Board of Directors of the
Company adopted, subject to shareholder approval, the
Employee Stock Purchase Plan ("Stock Purchase Plan")
covering 3,500,000 shares of the Company's Common Stock,
subject to adjustment for certain changes in the number
of outstanding shares of the Company's Common Stock.
The purpose of the Stock Purchase Plan is to provide an
opportunity to eligible employees of the Company and its
subsidiaries (with the specific exception of
Nordstrom.com, LLC) to increase their proprietary
interest in the success of the Company by purchasing
Common Stock on favorable terms. The Stock Purchase Plan
is summarized below. This summary is qualified in all
respects by reference to the full text of the Stock
Purchase Plan, which has been filed with the Commission
as an Appendix to this Proxy Statement.
SUMMARY OF THE PLAN
The Stock Purchase Plan consists of consecutive six
month offerings, until the date when all the shares of
Common Stock authorized to be delivered upon exercise of
options granted under the Stock Purchase Plan have been
delivered. The first offering under the Stock Purchase
Plan will commence on April 16, 2000 and will end on
September 30, 2000. Subsequent offering periods will
commence on each April 1 and October 1.
With certain exceptions, any employee of the Company on
February 1 who remains an employee through April 1 may
participate in the offering period commencing April 1,
and any employee of the Company on August 1 who remains
an employee through October 1 may participate in the
offering period commencing October 1.
The price at which the employee may purchase the Common
Stock is 85% of the closing price for the Common Stock
as reported by the New York Stock Exchange on the day
the offering commences or on the day the offering
terminates, whichever is lower. An employee may elect to
have up to 10% of his or her compensation withheld for
the purpose of purchasing stock under the Stock Purchase
Plan. On the date an offering commences, each
participating employee is deemed to be granted an option
to purchase up to the lesser of (i) 1,000 shares or (ii)
that number of shares determined by dividing 10% of the
employee's annualized compensation by the lesser of 85%
of the fair market value of the Common Stock on the date
the offering commences, or on the date the offering
terminates and dividing the quotient by two.
Unless the participant elects to withdraw from the
offering, each participant who continues to be employed
by the Company on the date the offering terminates is
deemed to have exercised the option and purchased on
such date the number of shares (subject to the maximum
number covered by his or her option) as may be purchased
with the amount of his or her
18
<PAGE> 21
payroll deductions at the offering price. If employees
subscribe to purchase more than the number of shares of
Common Stock available during any offering, the
available shares are allocated on a pro rata basis to
subscribing employees.
The Board of Directors of the Company may at any time
amend, suspend or terminate the Stock Purchase Plan.
Except in connection with certain reorganizations or
recapitalizations of the Company, any increase in the
aggregate number of shares of Common Stock to be issued
under the Stock Purchase Plan shall be subject to
approval by a vote of the Shareholders.
The Stock Purchase Plan is administered by the
Compensation and Stock Option Committee, which is
authorized to make rules and regulations for the
administration and interpretation of the Stock Purchase
Plan.
FEDERAL INCOME TAX CONSEQUENCES
The Stock Purchase Plan is intended to be an "employee
stock purchase plan" as defined in Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"),
which provides that the employee does not have to pay
federal income tax with respect to shares purchased
under the Stock Purchase Plan until he or she sells the
shares. At the time of sale, the employee is required to
pay federal income tax on the difference, if any,
between the price at which he or she sold the shares and
the price he or she paid for them.
If the employee has owned the shares for more than one
year and disposes of them at least two years after the
day the offering commenced, he or she will be taxed as
follows: If the market price of the shares on the date
they are sold is equal to or less than the price paid
for the shares under the Stock Purchase Plan, the
employee will recognize a long-term capital loss equal
to the price paid over the sale price. If the sale price
is higher than the price paid under the Stock Purchase
Plan, the employee will recognize ordinary income in an
amount equal to the lesser of (i) the market price of
the shares on the date the offering commenced over the
price paid or (ii) the excess of the sale price over the
price paid. Any additional gain would be recognized as
long-term capital gain income.
If the employee sells the shares before he or she has
owned them for more than one year or before the
expiration of a two-year period commencing on the day
the offering commenced, the employee will recognize
ordinary income on the amount of the difference between
the purchase price and the fair market value of the
shares on the date of purchase, and the Company will
receive an expense deduction for the same amount. The
employee will recognize a capital gain or loss for the
difference between the sale price and the fair market
value on the date of purchase. The Company will
generally not be entitled to a tax deduction upon the
purchase or sale of shares under the Stock Purchase
Plan.
NEW PLAN BENEFITS
Participation in the Stock Purchase Plan is entirely
within the discretion of the eligible employees of the
Company. As a result, the Company cannot forecast the
extent of future participation. Therefore, the Company
has omitted the tabular disclosure of the benefits or
amounts allocated under the Stock Purchase Plan.
19
<PAGE> 22
The Board of Directors unanimously recommends a vote FOR
approval of the Stock Purchase Plan.
PROPOSAL 3:
APPROVAL OF AN
AMENDMENT TO THE
1997 EMPLOYEE
STOCK OPTION PLAN The Company's Board of Directors recommends that
Shareholders approve an amendment to the Nordstrom, Inc.
1997 Stock Option Plan (the "Option Plan"), which has
been adopted by the Company's Board of Directors subject
to Shareholder approval, to increase the number of
shares of Common Stock authorized under the Option Plan
to 18,000,000. The Option Plan originally was adopted by
the Company's Shareholders on May 20, 1997. At that
time, there were 10,000,000 shares (reflecting a
subsequent stock split) of Common Stock authorized for
nonqualified and incentive stock option grants and for
grants of restricted shares of Common Stock under the
Option Plan. On May 19, 1998, the Option Plan was
amended to allow, among other things, grants of
performance share units. Shares authorized under the
Option Plan are subject to adjustment in the event of
stock splits, stock dividends, and other situations. The
Option Plan explicitly mandates that options under the
Option Plan be granted at the then-current fair market
value of the Company's Common Stock and prohibits the
repricing of options. As an administrative matter, the
Compensation and Stock Option Committee has determined
that only 1,000,000 of the additional 8,000,000 shares
available under the Plan may be used for grants of
restricted stock or performance share units.
A complete copy of the Option Plan, as amended, has been
filed with the Commission as an Appendix to this Proxy
Statement.
PURPOSE
The purposes of the Option Plan are to attract and
retain the best available personnel for positions of
substantial responsibility, to provide additional
incentive to employees of the Company or any of its
subsidiaries, and to promote the success of the
Company's business.
EMPLOYEE PARTICIPANTS
Participants in the Option Plan include any employee of
the Company or any parent or subsidiary of the Company
and are selected by the Compensation and Stock Option
Committee, or a subcommittee thereof (the "Committee").
The Company estimates there are approximately 1,200
persons who would currently be eligible to participate
in the Option Plan. The Option Plan provides that no
participant may be granted in any year more than 400,000
shares of restricted stock, 400,000 Performance Shares
(defined below), or options to purchase more than
400,000 shares of Common Stock, as adjusted as provided
in the Option Plan.
ADMINISTRATION
The Committee shall either (i) consist solely of two or
more non-employee directors of the Company as defined in
Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, or (ii) cause any director who is not a
non-employee director to abstain from any action by the
Committee related to granting options to executive
officers of the Company. The Board of Directors may also
appoint one or more separate committees of the Board of
Directors which may administer the Option Plan with
respect to employees who are not executive officers of
the Company.
20
<PAGE> 23
The Board of Directors may amend or terminate the Option
Plan as desired, without further action by the
Shareholders, except to the extent required by
applicable law.
TERMINATION
The Option Plan will continue in effect until all shares
of stock available for grant have been acquired through
exercise of options or otherwise, or for a term of ten
(10) years from its effective date (May 20,1997),
whichever is earlier. The Option Plan may be terminated
at such earlier time as the Board of Directors may
determine. Termination of the Option Plan will not
affect the rights and obligations arising under
restricted stock, performance share units, or options
granted under the Option Plan and then in effect.
TERMS OF STOCK OPTIONS
The Committee may grant incentive stock options as
defined in Section 422 of the Internal Revenue Code of
1986, as amended, and non-qualified stock options.
Options granted pursuant to the Option Plan need not be
identical but each option is subject to certain terms
and conditions of the Option Plan. The Option Plan
explicitly mandates that options under the Option Plan
be granted at the then-current fair market value of the
Company's Common Stock. The exercise price may be paid
as determined by the Committee. Options granted expire
within a period of not more than ten (10) years from the
grant date. Options shall be exercisable in such manner
and at such times as the Committee may determine. The
Committee, may, at any time prior to exercise and
subject to consent of the participant, amend, modify or
cancel any option previously granted. The Option Plan,
however, explicitly prohibits the repricing of options.
TERMS OF RESTRICTED STOCK
The Committee may also grant shares of restricted Common
Stock of the Company with such terms and conditions as
may be determined by the Committee. Grants of shares of
restricted stock shall be made at such cost as the
Committee shall determine and may be issued for no
monetary consideration, subject to applicable state law.
Shares of restricted stock shall be issued and delivered
at the time of the grant or as otherwise determined by
the Committee, but shall be subject to forfeiture until
provided otherwise in the applicable restricted stock
agreement. Each certificate representing shares of
restricted stock shall bear a legend referring to the
risk of forfeiture of the shares and stating that such
shares are nontransferable until all restrictions have
been satisfied and the legend has been removed. At the
discretion of the Committee, the grantee may or may not
be entitled to full voting and dividend rights with
respect to all shares of restricted stock from the date
of grant.
TERMS OF PERFORMANCE SHARES
Finally, the Committee may grant performance share units
which entitle the participant to shares of Common Stock
or cash in lieu thereof (the "Performance Shares") upon
the achievement of such performance goals as may be
established by the Committee at the time of grant. Those
performance goals may be based on any one or combination
of the following performance criteria: (a) achievement
of a specified percentage increase or quantitative level
in the Company's Shareholder return as compared to the
Standard & Poor's Retail Store Composite or other
comparator group, (b) achievement of a specified
percentage increase or
21
<PAGE> 24
quantitative level in the trading price of the Company's
Common Stock, (c) achievement of a specified percentage
increase or quantitative level in the results of
operations, such as sales, earnings, cash flow, economic
profit or return on investment (including return on
equity, return on capital employed or return on assets)
of the Company or of a subsidiary or division or other
segment of the Company for which the participant has
responsibilities, (d) achievement of a specified
percentage increase or quantitative level in other
financial results, such as profit margins, expense
reduction or asset management goals of the Company or of
a subsidiary or division or other segment of the Company
for which the participant has responsibilities, or (e)
achievement of a specified percentage increase or
quantitative level in the internal or external market
share of a product or line of products. Only after the
performance goals have been attained may the Committee
authorize the payment of cash in lieu of Performance
Shares or the issuance of Performance Shares registered
in the name of the participant, or both.
If the participant's employment with the Company or any
subsidiary is terminated before the end of the period of
time over which Performance Shares may be earned (a
"Performance Cycle") for any reason other than
retirement, disability, or death, the participant shall
forfeit all rights with respect to any Performance
Shares that were being earned during the Performance
Cycle. The Committee may establish guidelines providing
that if a participant's employment is terminated before
the end of a Performance Cycle by reason of disability,
or death, the participant shall be entitled to a
prorated payment with respect to any Performance Shares
that were being earned during the Performance Cycle. If
the participant's employment is terminated before the
end of a Performance Cycle by reason of retirement, the
participant's rights with respect to any Performance
Shares being earned during the Performance Cycle shall
continue as if the participant's employment had
continued through the end of the Performance Cycle.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax
consequences of the Option Plan is intended to be a
summary of applicable federal law. State and local tax
consequences may differ. Because the federal income tax
rules governing options and related payments are complex
and subject to frequent change, optionees are advised to
consult their tax advisors prior to exercise of options
or dispositions of stock.
Incentive stock options and non-qualified stock options
are treated differently for federal income tax purposes.
Incentive stock options are intended to comply with the
requirements of Section 422 of the Code. Non-qualified
stock options need not comply with such requirements.
An optionee is not taxed on the grant or exercise of an
incentive stock option. The difference between the
exercise price and the fair market value of the shares
on the exercise date will, however, be a preference item
for purposes of the alternative minimum tax. If an
optionee holds the shares acquired upon exercise of an
incentive stock option for at least two years following
grant and at least one year following exercise, the
optionee's gain, if any, upon a subsequent disposition
of such shares is long term capital gain. The measure of
the gain is the difference between the proceeds received
on disposition and the optionee's basis in the shares
(which generally equals the exercise price). If an
optionee disposes of stock acquired pursuant to exercise
of an incentive stock option before
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satisfying the one and two-year holding periods
described above, the optionee will recognize both
ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be
the lesser of (i) the amount realized on disposition
less the optionee's adjusted basis in the stock (usually
the option price) or (ii) the difference between the
fair market value of the stock on the exercise date and
the option price. The balance of the consideration
received on such a disposition will be long term capital
gain if the stock had been held for at least one year
following exercise of the incentive stock option. The
Company is not entitled to an income tax deduction on
the grant or exercise of an incentive stock option or on
the optionee's disposition of the shares after
satisfying the holding period requirement described
above. If the holding periods are not satisfied, the
Company will be entitled to a deduction in the year the
optionee disposes of the shares, in an amount equal to
the ordinary income recognized by the optionee.
An optionee is not taxed on the grant of a non-qualified
stock option. On exercise, however, the optionee
recognizes ordinary income equal to the difference
between the option price and the fair market value of
the shares on the date of exercise. The Company is
entitled to an income tax deduction in the year of
exercise in the amount recognized by the optionee as
ordinary income. Any gain on subsequent disposition of
the shares is long term capital gain if the shares are
held for at least one year following exercise. The
Company does not receive a deduction for this gain.
A grantee of shares of restricted stock recognizes
ordinary income on the date of receipt equal to the
value of such shares (less any consideration paid by the
grantee) unless the shares of stock are subject to a
substantial risk of forfeiture. If the shares of stock
are subject to a substantial risk of forfeiture, absent
an election by the grantee to be taxed on the date of
grant, then the grantee will recognize ordinary income
when the risk of forfeiture lapses. The Company is
entitled to an income tax deduction in the year the
grantee recognizes income equal to the amount of income
recognized by grantee.
When a participant receives payment with respect to
Performance Shares, the amount of cash and the fair
market value of the Common Stock received will be
ordinary income to the participant and will be allowed
as a deduction for federal income tax purposes to the
Company, assuming that the deduction is not disallowed
by Section 162(m) of the Code or otherwise limited under
the Code.
OPTION PLAN BENEFITS
The Committee has full discretion to determine the
number and amount of options, shares of restricted
stock, and performance share units to be granted to
employees under the Option Plan, subject to annual
limitations on the total number of options, shares of
restricted stock, and performance share units that may
be granted to any employee. Therefore, the benefits and
amounts that will be received by each of the named
executive officers, the executive officers as a group
and all other employees under the Option Plan are not
presently determinable. Details on stock options granted
during the last three years to certain executive
officers are presented in the Summary Compensation
Table.
The Board of Directors recommends a vote FOR the
approval of the amendment to the Option Plan.
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PROPOSAL 4:
RATIFICATION OF
APPOINTMENT OF AUDITORS The Board of Directors, acting upon the recommendation
of the Audit Committee, has appointed the independent
public accounting firm of Deloitte & Touche LLP to be
the Company's auditors for the 2000 fiscal year. As in
the past, the Board has determined that it would be
desirable to request ratification of its appointment by
the Shareholders of the Company. If the Shareholders do
not ratify the appointment of Deloitte & Touche LLP, the
appointment of independent public accountants will be
reconsidered by the Board. A representative of Deloitte
& Touche LLP will be present at the Annual Meeting, will
have the opportunity to make a statement if he or she so
desires, and will be available to respond to appropriate
questions.
The Board of Directors recommends RATIFICATION of
Deloitte & Touche LLP as auditors for the Company.
PROPOSAL 5: SHAREHOLDER PROPOSAL
Domini Social Investments LLC, 11 West 25th Street, 7th
Floor, New York, NY, 10010-2001, has notified the
Company that it intends to present the following
Proposal at the Annual Meeting:
"Whereas: Consumers and shareholders continue to be
seriously concerned about whether low wages and abusive
working conditions exist in facilities where the
products they buy are produced or assembled.
"U.S.-based companies are importing more goods from
countries where working conditions fall far below basic
standards of fair and humane treatment. Our company
purchases goods produced in countries like China where
human rights abuses and unfair labor practices have been
well documented. (U.S. State Department's "China Country
Report on Human Rights Practices -- 1998")
"A growing number of students have called on their
universities to adopt codes of conduct to make sure
clothing sold in university stores is made under humane
conditions. Students have pressed for a living wage,
upholding the rights of women in the workplace, public
disclosure of conditions in factories and transparency
in reporting, and verification of compliance by
organizations that are independent of companies.
("Sweatshop Reform," Business Week, 5/3/99)
"Our company should take effective action to ensure it
does not and will not do business with suppliers who
manufacture items for sale using forced labor, convict
labor, or illegal child labor, or who fail to satisfy
all applicable standards and laws protecting their
employees' wages, benefits, working conditions, freedom
of association and other rights.
"Reports that overseas suppliers are exploiting workers
may damage our company's reputation and generate a
consumer backlash. We believe our company needs to
support the right of workers to organize and bargain
collectively any place they operate. Our company should
demonstrate enforcement of its code by developing
independent monitoring programs with local, respected
religious, human rights or labor rights groups to ensure
compliance with its vendor standards and assure
consumers that products are not made under abusive labor
conditions.
"In an effort to improve the quality of life of workers
who make its products, our company should investigate
implementing ongoing wage adjustments, ensuring that
workers have adequate purchasing power and a sustainable
living wage. Wage adjustments would add little to
overall production costs
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while contributing to productivity. In addition, our
company, rather than terminating contracts, needs to
establish incentives to encourage its suppliers and
vendors to raise labor standards.
"Resolved: Shareholders request the Board of Directors
to prepare at reasonable expense a report on Vendor
Standards compliance mechanisms and progress in
achieving compliance for its vendors, subcontractors and
buying agents in the countries where it sources. A
summary of the results should be reported to
shareholders by October, 2000.
"Supporting Statement: To be effective, enforcement of
company codes must be carefully monitored. The Gap, Inc.
has participated in an independent monitoring process in
El Salvador with respected religious and human rights
and labor rights institutions for the past four years.
Other companies have begun to develop independent
monitoring programs in conjunction with local
non-government organizations. Through the use of
independent monitoring, consumers and investors can have
greater confidence that the company's code of vendor
conduct is enforced, protecting the company from
negative publicity associated with the discovery of
sweatshop practices."
THE COMPANY'S STATEMENT IN OPPOSITION
The Company has adopted a multi-step approach with the
goal of ensuring that the facilities operated by its
vendors, subcontractors, and buying agents adhere to a
high degree of ethical labor standards, provide a safe
and healthy working environment, do not engage in
discriminatory practices or violate basic human rights,
and comply with all applicable employment laws with
respect to wages and overtime. Since 1994, the Company
has attempted to distribute the Nordstrom Partnership:
Standards and Business Practice Guidelines (the
"Guidelines") to all existing and new vendors. The
Guidelines apply to both domestic and overseas vendors.
This code of conduct has been translated into several
foreign languages for posting at the various facilities
operated by Nordstrom's contractors.
The Guidelines state that Nordstrom expects its vendors
to comply with all applicable wage, hour and overtime
laws, follow fair employment practices, comply with
environmental standards, and provide a safe work
environment. The Guidelines also specifically forbid the
use of child, prison, or other forced labor. Nordstrom
routinely reviews the Guidelines to determine whether
modifications are appropriate in light of new
developments.
In order to ensure compliance with the Guidelines and
applicable laws by vendors who manufacture private label
goods for Nordstrom: (i) vendors, subcontractors, and
buying agents must confirm in writing that they will
comply with the Guidelines prior to the initial
placement of production; (ii) Nordstrom representatives
review the Company's code of conduct and quality
standards in person with manufacturers; and (iii)
Nordstrom personnel and/or third parties conduct random
announced and unannounced on-site inspections where they
audit compliance with the Guidelines, including working
environment, age of employees, and compliance with
applicable laws. Nordstrom's corrections program for
suppliers found to be in violation of the Guidelines
includes remedial measures or, in the alternative, among
other things, cancellation of outstanding orders,
contract termination, and legal action.
As with any other matter which might be of interest to
Shareholders, the Company is always ready and willing to
discuss Nordstrom's approach to
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the matters raised in this shareholder proposal with any
interested Shareholder and to provide them with
non-confidential information maintained by the Company.
More specifically, Nordstrom routinely responds to
inquiries from customers, Shareholders, and other
concerned citizens regarding the matters raised in the
Proposal. Indeed, Nordstrom has engaged, and continues
to engage the proponent of the Shareholder proposal in
dialogue regarding its concerns and inquiries.
Nordstrom also has issued press releases regarding the
Guidelines, vendor standards, and compliance mechanisms
providing information on who to contact with further
questions. Nordstrom will continue to make information
concerning its policies, procedures, and practices
directly available to its Shareholders.
In that regard, to make Nordstrom's policy regarding the
matters underlying this Shareholder Proposal even more
clear to Shareholders, Nordstrom has included a
disclosure in its Annual Report disseminated to all
Shareholders with its 2000 Proxy Materials assuring
Shareholders that Nordstrom is always ready and willing
to discuss matters of concern to Shareholders, including
its vendor standards compliance mechanisms and progress
in achieving compliance.
Since Nordstrom has made and will continue to make the
information requested regularly available to
Shareholders, the Company believes that no such report
is necessary.
Accordingly, the Board of Directors of the Company
recommends that you vote AGAINST this Proposal.
SOLICITATION OF PROXIES Solicitation of proxies will be made primarily by mail,
and proxies may also be solicited personally, by
telephone, by facsimile, and by regular officers and
employees of the Company who will receive no additional
compensation for their services. Brokers or other
persons holding shares in their names or in the names of
nominees will be reimbursed their reasonable expenses
for sending proxy material to principals and obtaining
their proxies. All expenses of proxy solicitation will
be paid by the Company.
COMPLIANCE WITH SECTION
16 OF THE EXCHANGE ACT
OF 1934 Based solely on its review of copies of reports made
pursuant to Section 16(a) of the Securities Exchange Act
of 1934 and the related regulations, the Company
believes that during the 1999 fiscal year all filing
requirements applicable to its directors, executive
officers, and 10 percent shareholders were satisfied,
except that one report was filed late by each of Kevin
T. Knight, J. Daniel Nordstrom, and Enrique Hernandez,
Jr.
OTHER MATTERS The Board of Directors of the Company knows of no other
matters that may come before the meeting. However, if
any other matters should properly come before the
meeting or any adjournment thereof, it is the intention
of the persons named in the Proxy to vote the Proxy in
accordance with their best judgment.
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SHAREHOLDER PROPOSALS
FOR 2001 ANNUAL MEETING Proposals for Shareholder action that eligible
Shareholders wish to have included in the Company's
Proxy Statement mailed to Shareholders in connection
with the Company's 2001 Annual Meeting must be received
by the Company at its principal executive offices at
1617 Sixth Avenue, Seattle, Washington, 98101-1742, on
or before December 1, 2000.
By order of the Board of Directors,
/s/ N. CLAIRE STACK
N. Claire Stack
Secretary
Seattle, Washington
April 10, 2000
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NORDSTROM LOGO
Printed on 25% Recycled Fiber
<PAGE> 31
APPENDIX A
NORDSTROM, INC.
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE OF THE PLAN
The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the
Company by purchasing Stock from the Company on favorable terms and to pay for
such purchases through payroll deductions. The Plan is intended to qualify
under Section 423 of the Code.
SECTION 2. ADMINISTRATION OF THE PLAN.
(a) COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee.
(b) COMMITTEE RESPONSIBILITIES. The Committee shall interpret the Plan
and make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.
SECTION 3. ENROLLMENT AND PARTICIPATION.
(a) OFFERING PERIODS. While the Plan is in effect, two Offering Periods
shall commence in each calendar year. With the exception of the first Offering
Period, which shall commence April 16, 2000, the Offering Periods shall consist
of the six-month periods commencing on each April 1 and October 1.
(b) ENROLLMENT. Any individual who qualifies as an Eligible Employee on
both (i) the date on which the Company identifies employees for purposes of
providing enrollment materials and (ii) the day preceding the first day of an
Offering Period may elect to become a Participant in the Plan for such Offering
Period by completing the enrollment process prescribed for this purpose by the
Committee.
(c) DURATION OF PARTICIPATION. Once enrolled in the Plan, a Participant
shall continue to participate in the Plan until (1) he or she ceases to be an
Eligible Employee, (2) withdraws from the Plan under Section 5(a), or (3)
reaches the end of the Offering Period in which his or her employee
contributions were discontinued under Section 8(b). A Participant who withdrew
from the Plan under Section 5(a) may again a Participant, if he or she then is
an Eligible Employee, by following the procedure described in Subsection (b)
above. A Participant whose employee contributions were discontinued
automatically under Section 8(b) shall automatically resume participation at the
beginning of the earliest Offering Period ending in the next calendar year, if
he or she then is an Eligible Employee.
<PAGE> 32
SECTION 4. EMPLOYEE CONTRIBUTIONS.
(a) FREQUENCY OF PAYROLL DEDUCTIONS. A Participant may purchase shares of
Stock under the Plan solely by means of payroll deductions. Payroll deductions,
as designated by the Participant pursuant to Subsection (b) below, shall occur
during the Offering Period on the payment date of any bonus, and on the payment
date of all other compensation while a Participant in the Plan.
(b) AMOUNT OF PAYROLL DEDUCTIONS. An Eligible Employee shall designate in
the enrollment process the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock. Such portion shall be a
whole percentage of the Eligible Employee's Compensation, but not less than one
percent (1%) nor more than ten percent (10%).
(c) CHANGING WITHHOLDING RATE. If a Participant wishes to change the rate
of payroll withholding, he or she may do so by notifying the Company using the
process prescribed for this purpose by the Committee. The new withholding rate
shall be effective as soon as reasonably practicable after such notification by
the Company.
(d) DISCONTINUING PAYROLL DEDUCTIONS. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so at any time by
using the process prescribed for this purpose by the Committee. Payroll
withholding shall cease as soon as reasonably practicable after such
notification. (In addition, employee contributions may be discontinued
automatically pursuant to Section 8(b).) A Participant who has discontinued
employee contributions may resume such contributions by using the process
prescribed for this purpose by the Committee. Payroll withholding shall resume
as soon as reasonably practicable after such notification.
SECTION 5. WITHDRAWAL FROM THE PLAN.
(a) WITHDRAWAL. A Participant may elect to withdraw from the Plan by using
the process prescribed for this purpose by the Committee at any time before the
last day of an Offering Period. As soon as reasonably practicable thereafter,
payroll deductions shall cease and the entire amount credited to the
Participant's Plan Account shall be refunded to him or her in cash, without
interest. No partial withdrawals shall be permitted.
(b) RE-ENROLLMENT AFTER WITHDRAWAL. A former Participant who has
withdrawn from the Plan shall not be a Participant until he or she re-enrolls
in the Plan under Section 3(b). Re-enrollment may be effective only at the
commencement of an Offering Period.
SECTION 6. CHANGE IN EMPLOYMENT STATUS.
(a) TERMINATION OF EMPLOYMENT. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)
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<PAGE> 33
(b) LEAVE OF ABSENCE. For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on an approved leave of absence.
Employment shall be deemed to terminate in any event when the approved leave
ends, unless the Participant immediately returns to work.
(c) DEATH. In the event of the Participant's death, the amount
credited to his or her Plan Account shall be paid to a beneficiary designated by
him or her for this purpose in the enrollment process or, if none, or if the
designee has predeceased the Participant, then the Participant will be deemed to
have designated the following as his or her surviving beneficiaries and
contingent beneficiaries with priority in the order named below:
(a) first, to his widow or her widower, as the case may be;
(b) next, to his or her children, in equal shares;
(c) next, to his or her parents, in equal shares;
(d) next, to his or her brothers and sisters, in equal shares; or
(e) next, to his or her estate.
For purposes of determining the appropriate named or deemed beneficiary or
contingent beneficiary, an individual is considered to survive the Participant
if that individual is alive seven days after the date of the Participant's
death.
SECTION 7. PLAN ACCOUNTS AND PURCHASE OF SHARES.
(a) PLAN ACCOUNTS. A Plan Account shall be maintained in the name of each
Participant. Whenever an amount is deducted from the Participant's Compensation
under the Plan, such amount shall be credited to the Participant's Plan Account.
Amounts credited to Plan Accounts shall not be trust funds and may be commingled
with the Company's general assets and applied to general corporate purposes. No
interest shall be credited to Plan Accounts.
(b) PURCHASE PRICE. The Purchase Price for each share of Stock purchased
at the close of an Offering Period shall be the lower of:
(i) 85% of the Fair Market Value of such share on the last trading in
such Offering Period; or
(ii) 85% of the Fair Market Value of such share on the first trading
day of such Offering Period.
(c) NUMBER OF SHARES PURCHASED. As of the last day of each Offering
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated
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<PAGE> 34
in accordance with this Subsection (c), unless the Participant has previously
elected to withdraw from the Plan in accordance with Section 5(a). The amount
then in the Participant's Plan Account shall be divided by the Purchase Price,
and the number of shares that results shall be purchased from the Company with
the funds in the Participant's Plan Account. The foregoing notwithstanding, no
Participant shall purchase more than one thousand (1,000) shares of Stock with
respect to any Offering Period nor more than the amounts of Stock set forth in
Sections 8(b) and 13(a). Any fractional share, as calculated under this
Subsection (c), shall be rounded down to the next lower whole share.
(d) AVAILABLE SHARES INSUFFICIENT. In the event that the aggregate number
of shares that all Participants elect to purchase during an Offering Period
exceeds the maximum number of shares remaining available for issuance under
Section 13(a), then the number of shares to which each Participant is entitled
shall be determined by multiplying the number of shares available for issuance
by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.
(e) ISSUANCE OF STOCK. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon
as reasonably practicable after the close of the applicable Offering Period,
except that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship
or as community property.
(f) UNUSED CASH BALANCES. Any amount remaining in the Participant's Plan
Account that represents the Purchase Price for a fractional share shall be
carried over in the Participant's Plan Account to the next Offering Period. Any
amount remaining in the Participant's Plan Account that represents the Purchase
Price for whole shares that could not be purchased by reason of Subsection (c)
above, Section 8(b) or Section 13(a) shall be refunded to the Participant in
cash, without interest.
(g) SHAREHOLDER APPROVAL. Any other provision of the Plan
notwithstanding, no shares of Stock shall be purchased under the Plan unless
and until the Company's shareholders have approved the adoption of the Plan.
SECTION 8. LIMITATIONS ON STOCK OWNERSHIP.
(a) FIVE PERCENT LIMIT. Any other provision of the Plan notwithstanding,
no Participant shall be granted a right to purchase Stock under the Plan if such
Participant, immediately after his or her election to purchase such Stock,
would own stock possessing more than 5% of the total combined voting power or
value of all classes of stock of the Company or any parent or Subsidiary of the
Company. For purposes of this Subsection (a), the following rules shall apply:
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<PAGE> 35
(i) Ownership of stock shall be determined after applying the
attribution rules of Section 424(d) of the Code;
(ii) Each Participant shall be deemed to own any stock that he or she
has a right or option to purchase under this or any other plan; and
(iii) Each Participant shall be deemed to have the right to purchase
one thousand (1,000) shares of Stock under this Plan with respect to each
Offering Period.
(b) DOLLAR LIMIT. Any other provision of the Plan notwithstanding, no
Participant shall purchase Stock with a Fair Market Value in excess of the
following limit:
(i) In the case of Stock purchased during an Offering Period that
commenced in the current calendar year, the limit shall be equal to (A)
$25,000 minus (B) the Fair Market Value of the Stock that the Participant
previously purchased in the current calendar year under the Plan.
(ii) In the case of Stock purchased during an Offering Period that
commenced in the immediately preceding calendar year, the limit shall be
equal to (A) $50,000 minus (B) the Fair Market Value of the Stock that the
Participant previously purchased under this Plan in the current calendar
year and in the immediately preceding calendar year.
For purposes of this Subsection(b), the Fair Market Value of Stock will be
determined in each case as of the beginning of the Offering Period in which
such Stock is purchased. If a Participant is precluded by this Subsection(b)
from purchasing additional Stock under the Plan, then his or her employee
contributions shall automatically be discontinued and shall resume at the
beginning of the earliest Offering Period ending in the next calendar year (if
he or she then is an Eligible Employee).
SECTION 9. RIGHTS NOT TRANSFERABLE.
The rights of any Participant under the Plan, or any Participant's interest
in any Stock or moneys to which he or she may be entitled under the Plan, shall
not be transferable by voluntary or involuntary assignment or by operation of
law, or in any other manner other than by beneficiary designation or the laws of
descent and distribution. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, other
than by beneficiary designation or the laws of descent and distribution, then
such act shall be treated as an election by the Participant to withdraw from the
Plan under Section 5(a).
SECTION 10. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan or in any right granted under the Plan shall confer
upon the Participant any right to continue in the employ of a Participating
Company for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Participating Companies or of the
Participant, which rights are hereby expressly reserved by each, to terminate
his or her employment at any time and for any reason, with or without cause.
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<PAGE> 36
SECTION 11. NO RIGHTS AS A SHAREHOLDER
A Participant shall have no rights as a shareholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan
until such shares have been purchased on the last day of the applicable
Offering Period.
SECTION 12. SECURITIES LAW REQUIREMENTS.
Shares of Stock shall not be issued under the Plan unless the issuance and
delivery of such shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange or other
securities market on which the Company's securities may then be traded.
SECTION 13. STOCK OFFERED UNDER THE PLAN.
(a) AUTHORIZED SHARES. The aggregate number of shares of Stock available
for purchase under the Plan shall be three million, five hundred thousand
(3,500,000) subject to adjustment pursuant to this Section 13.
(b) ANTIDILUTION ADJUSTMENTS. The aggregate number of shares of Stock
offered under the Plan, the one thousand (1,000) share limitation described in
Section 7(c) and the price of shares that any Participant has elected to
purchase shall be adjusted proportionately by the Committee for any increase or
decrease in the number of outstanding shares of Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, any
other increase or decrease in such shares effected without receipt or payment of
consideration by the Company, the distribution of the shares of a Subsidiary to
the Company's shareholders or a similar event.
(c) REORGANIZATIONS. Any other provision of the Plan notwithstanding,
immediately prior to the effective time of a Corporate Reorganization, the
Offering Period then in progress shall terminate and shares shall be purchased
pursuant to Section 7, unless the Plan is assumed by the surviving corporation
or its parent corporation pursuant to the plan of merger or consolidation. The
Plan shall in no event be construed to restrict in any way the Company's right
to undertake a dissolution, liquidation, merger, consolidation or other
reorganization.
SECTION 14. AMENDMENT OR DISCONTINUANCE
The Board shall have the right to amend, suspend or terminate the Plan at
any time and without notice. Except as provided in Section 13, any increase in
the aggregate number of shares of Stock to be issued under the Plan shall be
subject to approval by a vote of the shareholders of the Company. In addition,
any other amendment of the Plan shall be subject to approval by a vote of the
shareholders of the Company to the extent required by an applicable law or
regulation.
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SECTION 15. DEFINITIONS.
(a) "BOARD" means the Board of Directors of the Company, as constituted
from time to time.
(b) "CODE" means the Internal Revenue Code of 1986, as amended.
(c) "COMMITTEE" means the Compensation Committee of the Board.
(d) "COMPANY" means Nordstrom, Inc., a Washington corporation.
(e) "COMPENSATION" means (i) the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses (if
specifically designated as Compensation by the Participant), incentive
compensation, commissions, overtime pay and shift premiums, plus (ii) any
pre-tax contributions made by the Participant under Section 401(k) or 125 of
the Code. "Compensation" shall exclude all non-cash items, moving or relocation
allowances, cost-of-living equalization payments, car allowances, tuition
reimbursements, imputed income attributable to cars or life insurance,
severance pay, fringe benefits, contributions or benefits received under
employee benefit plans, income attributable to the exercise of stock options,
and similar items. The Committee shall determine whether a particular item is
included in Compensation.
(f) "CORPORATE REORGANIZATION" means:
(i) The consummation of a merger or consolidation of the Company with
or into another entity, or any other corporate reorganization; or
(ii) The sale, transfer or other disposition of all or substantially
all of the Company's assets or the complete liquidation or dissolution of
the Company.
(g) "ELIGIBLE EMPLOYEE" means any employee of a Participating Company on
February 1 or August 1.
The foregoing notwithstanding, an individual shall not be considered an
Eligible Employee if (i) his or her participation in the Plan is prohibited by
law of any country which has jurisdiction over him or her, (ii) he or she is
subject to a collective bargaining agreement that does not provide for
participation in the Plan, or (iii) he or she is designated as an independent
contractor, even if later determined by a court of competent jurisdiction or
otherwise to be a common law employee of a Participating Company.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
(i) "FAIR MARKET VALUE" means the market price of Stock, determined by
the Committee as follows:
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<PAGE> 38
(i) If stock was traded on The Nasdaq National Market on the date in
question, then the Fair Market Value shall be equal to the last sale price
quoted for such date by The Nasdaq National Market;
(ii) If Stock was traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by
the applicable composite transactions report for such date; or
(iii) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Wall Street Journal or as reported
directly to the Company by Nasdaq or a stock exchange. Such determination shall
be conclusive and binding on all persons.
(j) "OFFERING PERIOD" means a six-month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant
to Section 3(a).
(k) "PARTICIPANT" means an Eligible Employee who elects to participate in
the Plan, as provided in Section 3(b).
(l) "PARTICIPATING COMPANY" means (i) the Company and (ii) each present
or future Subsidiary, except to the extent designated by the Committee as not
being a Participating Company. AS of the effective date of the Plan,
NORDSTROM.com, L.L.C. shall not be a Participating Company.
(m) "PLAN" means this Nordstrom, Inc. Employee Stock Purchase Plan, as it
may be amended from time to time.
(n) "PLAN ACCOUNT" means the account established for each Participant
pursuant to Section 7(a).
(o) "PURCHASE PRICE" means the price at which Participants may purchase
stock under the Plan, as determined pursuant to Section 7(b).
(p) "STOCK" means the Common Stock of the Company, no par value per share.
(q) "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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IN WITNESS WHEREOF, pursuant to proper authority, this Plan has been
executed on behalf of the Company by its Vice President of Personnel this _____
day of _______, 2000.
Attest: NORDSTROM, INC.
_____________________________ By:_________________________________
Joseph V. Demarte
Vice President of Personnel
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<PAGE> 40
APPENDIX B
NORDSTROM, INC.
1997 STOCK OPTION PLAN*
(AS AMENDED ON FEBRUARY 17, 1998,
FEBRUARY 15, 1999 AND FEBRUARY 16, 2000)
1. Purposes of the Plan. The purposes of this 1997 Nordstrom Stock
Option Plan (the "Plan") are to attract and retain the best available personnel
for positions of substantial responsibility with Nordstrom, Inc. (the
"Company"), to provide additional incentive in the form of options to purchase
the Company's shares of common stock, no par value per share (the "Common
Stock"), shares of restricted Common Stock or performance shares based on the
value of Common Stock (the "Benefits") to employees of the Company or any parent
or subsidiary of the Company which now exists or hereafter is organized or
acquired by or acquires the Company, and to promote the success of the business.
2. Eligibility. Any employee of the Company or any parent or subsidiary
of the Company may receive Benefits under the Plan.
3. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company, or a subcommittee thereof
(the "Committee"). The Committee shall either (i) consist solely of two or more
directors of the Company who are "non-employee directors" as defined under
Section 16 under the Securities Exchange Act of 1934, as amended and "outside
directors" as defined under Section 162(m) of the Internal Revenue Code of 1986,
as amended, or (ii) cause any director who is not a non-employee or outside
director to abstain from any action by the Committee related to granting
Benefits to executive officers of the Company. The Board of Directors may also
appoint one or more separate committees of the Board of Directors who may
administer the Plan with respect to employees who are not executive officers of
the Company.
4. Effective Date and Termination of Plan. Subject to shareholder
approval, the effective date of the Plan is May 20, 1997. The Plan shall
terminate when all shares of stock subject to Benefits granted under the Plan
shall have been acquired or on May 19, 2007, whichever is earlier, or at such
earlier time as the Board of Directors may determine. Termination of the Plan
will not affect the rights and obligations arising under Benefits granted under
the Plan and then in effect.
5. Shares Subject to the Plan. The Common Stock subject to Benefits
authorized to be granted under the Plan shall consist of 18,000,000 shares of
Common Stock, no par value, or the number and kind of shares of Common Stock or
other securities which shall be substituted or adjusted for such shares as
provided in Section 8. All or any shares of Common Stock subject to Benefits
which for any reason terminate may again be made subject to Benefits under the
Plan.
6. Grant, Terms and Conditions of Options. The Committee may grant
incentive stock options as defined in Section 422 of the Internal Revenue Code
of 1986, as amended and non-qualified stock options at any time and from time to
time prior to the termination of the Plan to those employees of the Company or
any parent or subsidiary of the Company who, in the
<PAGE> 41
Committee's judgment, are largely responsible through their judgment, interest,
ability and special efforts for the successful conduct of the Company's
operations. However, no participant shall be granted options in any year to
purchase more than 400,000 shares of Common Stock as adjusted as provided in
Section 9.
No participant shall have any rights as a shareholder of the
Company with respect to any Common Stock underlying any option granted hereunder
until those shares have been issued. Each option shall be evidenced by a written
stock option agreement which will expressly identify the option as an incentive
stock option or as a non-qualified stock option. Furthermore, the grant of an
incentive option pursuant to the Plan shall in no way be construed as an
alternative to the right of an optionee to purchase stock pursuant to any
present or future grant of a non-qualified option under any of the Company's
current or future stock option plans. Options granted pursuant to the Plan need
not be identical but each option is subject to the terms of the Plan and is
subject to the following terms and conditions:
6.1 Price. The exercise price of each option granted under the
Plan shall be at least equal to the fair market value of the Common
Stock on the date of grant, as determined by the Committee. The exercise
price may be paid as determined by the Committee.
6.2 Duration and Exercise or Termination of Option. Each option
granted under the Plan shall be exercisable in such manner and at such
times as the Committee shall determine. Each option granted must expire
within a period of ten (10) years from the grant date.
6.3 Transferability of Options. Each option shall be
transferable only by will or the laws of descent and distribution except
and unless the option provides for additional rights to transfer.
6.4 Other Terms and Conditions. Options may also contain such
other provisions, which shall not be inconsistent with any of the
foregoing terms, as the Committee shall deem appropriate. No option,
however, shall be repriced, and nothing contained in the Plan shall
confer upon any participant any right to continue in the Company's
employ or service nor limit in any way the Company's right to terminate
his or her employment or service at any time.
7. Grant, Terms and Conditions of Restricted Common Stock. The Committee
may grant shares of Common Stock with such restrictions, terms and conditions as
may be determined in the sole discretion of the Committee; provided, however,
that if the only restriction attached to the grant is vesting based on the lapse
of time, the minimum period for full vesting of the grant shall be three years.
Grants of shares of restricted Common Stock shall be made at such cost as the
Committee shall determine and may be issued for no monetary consideration,
subject to applicable state law. Shares of restricted Common Stock shall be
issued and delivered at the time of the grant or as otherwise determined by the
Committee, but may be subject to forfeiture until provided otherwise in the
applicable restricted stock agreement. Each certificate representing shares of
restricted Common Stock shall bear a legend referring to the risk of forfeiture
of the shares and
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<PAGE> 42
stating that such shares are nontransferable until all restrictions have been
satisfied and the legend has been removed. At the discretion of the Committee,
the grantee may or may not be entitled to full voting and dividend rights with
respect to all shares of restricted stock from the date of grant. No participant
shall be granted more than 400,000 shares of restricted Common Stock in any
year, as adjusted as provided in Section 9.
8. Grant, Terms and Conditions of Performance Share Units. The Committee
may grant performance share units which shall entitle the participant to shares
of Common Stock or cash in lieu thereof (the "Performance Shares") upon the
achievement of such performance goals as may be established by the Committee at
the time of grant based on any one or combination of the following performance
criteria: (a) achievement of a specified percentage increase or quantitative
level in the Company's shareholder return as compared to the S&P Retail Store
Composite or other comparator group, (b) achievement of a specified percentage
increase or quantitative level in the trading price of the Company's Common
Stock, (c) achievement of a specified percentage increase or quantitative level
in the results of operations, such as sales, earnings, cash flow, economic
profit or return on investment (including return on equity, return on capital
employed or return on assets) of the Company or of a subsidiary or division or
other segment of the Company for which the participant has responsibilities, (d)
achievement of a specified percentage increase or quantitative level in the
other financial results, such as profit margins, expense reduction or asset
management goals of the Company or of a subsidiary or division or other segment
of the Company for which the participant has responsibilities, or (e)
achievement of a specified percentage increase or quantitative level in the
internal or external market share of a product or line of products. At such time
as it is certified by the Committee that the performance goals established by
the Committee have been attained or otherwise satisfied, the Committee shall
authorize the payment of cash in lieu of Performance Shares or the issuance of
Performance Shares registered in the name of the participant, or both.
If the participant's employment with the Company or any parent or
subsidiary of the Company, as the case may be, is terminated before the end of
the period of time, designated by the Committee, over which Performance Shares
may be earned (a "Performance Cycle") for any reason other than retirement,
disability, or death, the participant shall forfeit all rights with respect to
any Performance Shares that were being earned during the Performance Cycle. The
Committee, in its sole discretion, may establish guidelines providing that if a
participant's employment is terminated before the end of a Performance Cycle by
reason of retirement, disability, or death, the participant shall be entitled to
a prorated payment with respect to any Performance Shares that were being earned
during the Performance Cycle. No participant shall be granted Performance Shares
for more than 400,000 shares of Common Stock in any year, as adjusted as
provided in Section 9.
9. Adjustment Upon Changes in Capitalization/Change in Control. The
number and kind of shares of Common Stock subject to Benefits under the Plan
shall be appropriately adjusted along with a corresponding adjustment in the
option exercise price, if applicable, to reflect any stock dividend, stock
split, split-up or any combination or exchange of shares, however accomplished.
An appropriate adjustment shall also be made with respect to the aggregate
number and kind of shares available for grant under the Plan. If the Company or
the shareholders of the Company enter into an agreement to dispose of all or
substantially all of the assets or shares by means of a sale, a
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<PAGE> 43
reorganization, a liquidation, or otherwise, all options shall become
immediately exercisable with respect to the full number of shares subject to
those options, all restrictions on any shares of restricted stock granted under
the Plan shall be immediately removed and all Performance Shares shall be earned
as if the applicable performance goals had been attained or otherwise satisfied.
10. Withholding. To the extent required by applicable federal, state,
local or foreign law, a participant shall make arrangements satisfactory to the
Company for the satisfaction of any withholding tax obligations that arise
pursuant to Benefits granted under the Plan. The Company shall not be required
to issue shares until such obligations are satisfied. The Committee may (but
shall not be required to) permit these obligations to be satisfied by having the
Company withhold a portion of the shares of stock that otherwise would be issued
to the participant or by delivering shares previously owned by the participant.
11. Amendment and Termination. The Board of Directors may amend or
terminate the Plan as desired, without further action by the Company's
shareholders, except to the extent required by applicable law.
* NOTE: As restated to reflect a two-for-one stock split of the Company's common
stock declared on May 19, 1998 in the form of a share dividend, payable on June
30, 1998 to all shareholders of record on June 8, 1998.
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<PAGE> 44
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NORDSTROM, INC.
1617 SIXTH AVENUE, SEATTLE, WASHINGTON 98101-1742
By signing this Proxy, the Shareholder appoints D. Wayne Gittinger and
N. Claire Stack, or either of them, with full power of substitution, proxies to
vote all shares of stock of the undersigned entitled to vote at the Annual
Meeting of Shareholders of Nordstrom, Inc. to be held May 16, 2000, at 11:00
a.m., Pacific Daylight Time, at the Westin Hotel, Grand Ballroom, 1900 Fifth
Avenue, Seattle, Washington, 98101, and any adjournment thereof, with all power
the Shareholder would possess if personally present.
This Proxy will be voted in accordance with the instructions given.
Unless revoked or otherwise instructed, the shares represented by this Proxy
will be voted for proposals 1, 2, 3, and 4, and against proposal 5, and will be
voted in accordance with the discretion of the proxies upon all other matters
that may come before the meeting or any adjournment thereof.
- --------------------------------------------------------------------------------
Please mark, date, sign, and return this proxy card promptly using the enclosed
postage-paid envelope.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
DIRECT DEPOSIT OF DIVIDEND
Nordstrom is pleased to offer its Shareholders of record the ability to have
quarterly dividends electronically deposited. This service is provided at no
cost to you and enables you to have your dividends deposited in an account at
the financial institution of your choice.
The advantages of having your dividend payment electronically deposited include:
the availability of funds, the elimination of a trip to the bank, and no
possibility of a stolen or lost check.
If you wish to take advantage of this service, then please contact ChaseMellon
Shareholder Services at 1-800-318-7045.
NORDSTROM
<PAGE> 45
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NORDSTROM, INC.
1617 SIXTH AVENUE, SEATTLE, WASHINGTON 98101-1742
By signing this Proxy, the Shareholder appoints D. Wayne Gittinger and
N. Claire Stack, or either of them, with full power of substitution, proxies to
vote all shares of stock of the undersigned entitled to vote at the Annual
Meeting of Shareholders of Nordstrom, Inc. to be held May 16, 2000, at 11:00
a.m., Pacific Daylight Time, at the Westin Hotel, Grand Ballroom, 1900 Fifth
Avenue, Seattle, Washington, 98101, and any adjournment thereof, with all power
the Shareholder would possess if personally present.
This Proxy will be voted in accordance with the instructions given.
Unless revoked or otherwise instructed, the shares represented by this Proxy
will be voted for proposals 1, 2, 3, and 4, and against proposal 5, and will be
voted in accordance with the discretion of the proxies upon all other matters
that may come before the meeting or any adjournment thereof.
- --------------------------------------------------------------------------------
Please mark, date, sign, and return this proxy card promptly using the enclosed
postage-paid envelope.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
DEAR PLAN PARTICIPANT:
Since you have a portion of your Nordstrom 401(k) account in the Nordstrom Stock
Fund, you have the right to vote the shares of Nordstrom stock held for your
account. This same proxy and voting information is furnished to all Nordstrom
Shareholders.
The Trustee of the Nordstrom Profit Sharing Retirement Trust (Wells Fargo Bank),
which holds the stock on your behalf, will receive your signed proxy and
instructions, as well as those made by other participants, and cast the
resulting vote on behalf of the Fund. YOUR VOTE WILL BE KEPT IN STRICT
CONFIDENCE BY THE TRUSTEE.
YOUR VOTE IS IMPORTANT. Please return only this proxy card in the enclosed
envelope. Do not combine it with any other proxy cards you may receive as they
may be tabulated by a different system. You must execute and return this proxy
card if you wish to vote these shares.
NORDSTROM
<PAGE> 46
Please mark /X/
your votes as
indicated in
this example
FOR all nominees WITHHOLD
(except as indicated to AUTHORITY to vote
the contrary below) for all nominees
PROPOSAL 1 - ELECTION OF DIRECTORS / / / /
D. W. Gittinger; E. Hernandez, Jr.; A. D. McLaughlin;
J. A. McMillan; B. A. Nordstrom; J. N. Nordstrom;
A. E. Osborne, Jr.; W. D. Ruckelshaus; J. J. Whitacre;
B. G. Willison
To withhold authority to vote for any individual nominee, write that nominee's
name on the space provided below.
_______________________________________
FOR AGAINST ABSTAIN
PROPOSAL 2 - APPROVAL OF THE COMPANY'S / / / / / /
EMPLOYEE STOCK PURCHASE PLAN
PROPOSAL 3 - APPROVAL OF AMENDMENT TO / / / / / /
THE COMPANY'S 1997 EMPLOYEE STOCK
OPTION PLAN
PROPOSAL 4 - RATIFICATION OF APPOINTMENT / / / / / /
OF AUDITORS
PROPOSAL 5 - SHAREHOLDER PROPOSAL / / / / / /
RELATING TO VENDOR STANDARDS
COMPLIANCE MECHANISMS
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
The Board of Directors at present knows of no other matters to
be brought before the meeting.
Signature(s)_____________________________________Dated_____________________,2000
PLEASE SIGN AS YOUR NAME APPEARS ON THIS PROXY. Joint signers should each sign.
Trustees, Guardians, Personal and other Representatives, please indicate your
full title.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
EXPERIENCE NORDSTROM ONLINE
At Nordstrom, we want to ensure that customers find shopping with us as
convenient and rewarding as possible. This is the very reason we created
www.nordstrom.com.
At NORDSTROM.com, you can log on and we will help connect you with the fashion
that's just right for you. You can order merchandise, learn about our Company
history, and review important shareholder information such as news releases,
daily stock quotes -- even the complete content of our annual report -- all from
the comfort of your home or office. The bottom line is, we want to be where our
customers want us to be.
Have you had a chance to register at our site yet? Let us keep you posted on all
promotions, events, and sales. Of course, we value and welcome your feedback. If
you have any comments regarding our web site, we encourage you to email us at
[email protected], or if you are visiting our site click on the 'contact us'
section and submit your comments.
NORDSTROM
