Exhibit 10.3

 

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AN AWARD (“AWARD”) FOR PERFORMANCE SHARE UNITS (“UNITS”), representing a number
of shares of Nordstrom Common Stock (“Common Stock”) as noted in the 2015 Notice
of Award of Performance Share Units (the “Notice”), of Nordstrom, Inc., a
Washington Corporation (the “Company”), is hereby granted to the Recipient
(“Unit holder”) on the date set forth in the Notice, subject to the terms and
conditions of this Agreement. The Units are also subject to the terms,
definitions and provisions of the Nordstrom, Inc. 2010 Equity Incentive Plan
(the “Plan”), adopted by the Board of Directors of the Company (the “Board”) and
approved by the Company’s shareholders, which is incorporated in this Agreement.
To the extent inconsistent with this Agreement, the terms of the Plan shall
govern. Terms not defined herein shall have the meanings as set forth in the
Plan. The Compensation Committee of the Board (the “Compensation Committee”) has
the discretionary authority to construe and interpret the Plan and this
Agreement. All decisions of the Compensation Committee upon any question arising
under the Plan or under this Agreement shall be final and binding on all
parties. The Units are subject to the following terms and conditions:

 

1. VESTING AND SETTLEMENT OF UNITS

 

     Units shall vest and be settled in accordance with the provisions of the
Plan as follows:

 

  (a) Vesting

 

       Each vested Unit is equal in value to one share of Common Stock. Except
as set forth in Section 4, Units shall vest at the applicable earned percentage
when the Compensation Committee certifies that the Company’s Total Shareholder
Return (TSR) relative to the TSR of companies in the Standard & Poor’s 500 (the
“Peer Group”) exceeds the percentile rankings set forth in the table below. For
purposes of determining the Company’s TSR relative to the TSR of other companies
in the Peer Group, the share price of Common Stock, and the share prices of the
companies in the Peer Group, are based on the thirty trading day closing price
average immediately prior to the start of the three fiscal-year period from
2/1/2015 to 2/3/2018 (“the Performance Cycle”), and the thirty trading day
closing price average immediately prior to the end of the Performance Cycle. The
companies in the Peer Group shall be determined on the first day of the
Performance Cycle and remain fixed for the duration of the Performance Cycle,
even if the companies in the Standard & Poor’s 500 change. In the event of a
change in control of a company included within the Peer Group during the
Performance Cycle where shareholders of that company receive cash, securities or
other assets in exchange for their shares, the TSR for such company for the
Performance Cycle shall be fixed as of the date of the change of control and
calculated including the amount received by the company’s shareholders in that
transaction.

 

Percentile Rank

Among Peers

 

PSUs Earned

as % of Grant

> 90%

  175%

> 80%

  150%

> 75%

  125%

> 65%

  100%

> 50%

  75%

£ 50%

  0%

       While the relative percentile rankings may change during the Performance
Cycle based upon mergers, acquisitions, dissolutions and other industry
consolidation involving the companies in the Peer Group, the application of the
percentile earned is applied consistently. Generally, Units will be earned if
the Nordstrom TSR for the Performance Cycle is in the top half of performers
relative to the other companies in the Peer Group.

 

  (b) Settlement

 

       Earned Units shall be settled upon vesting, unless the Unit holder has
elected to defer all or a portion of the Units into the Executive Deferred
Compensation Plan (EDCP) in accordance with its rules.

 

       Unless earlier deferred into the EDCP, the Unit holder shall elect
(during a period prior to settlement as prescribed by and in accordance with
procedures established by the Company) to settle the Units upon vesting in
either one share of Common Stock for each vested Unit or receive an equivalent
amount of cash for each vested Unit.

 

       The Unit holder may also elect to receive a combination of cash and
stock. In the event the Unit holder does not or is unable to make such a
settlement election, the Units shall be settled in stock. In the event the Units
are settled in cash, the amount of cash will be determined on the basis of the
closing price of Common Stock on the New York Stock Exchange on the last day of
the Performance Cycle.

 

  (c) Withholding Taxes

 

       No stock certificates or cash will be distributed to the Unit holder, or
amounts deferred into the EDCP, unless the Unit holder has made acceptable
arrangements to pay any withholding taxes that may be due as a result of the
settlement of this Award. These arrangements may include withholding shares of
Common Stock that otherwise would be distributed when the Units are settled. The
fair market value of the shares required to cover withholding will be applied to
the withholding of taxes prior to the Unit holder receiving the remaining shares
or the cash value of those shares.

 

 

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  (d) Restrictions on Resale

 

       The Unit holder agrees not to sell any shares of Common Stock at a time
when applicable laws or Company policies prohibit a sale. This restriction will
apply as long as the Unit holder is an employee, consultant or director of the
Company or a subsidiary or affiliate of the Company.

 

2. ACCEPTANCE OF UNITS

 

     Although the Company may or may not require the Unit holder’s signature
upon accepting the Award, the Unit holder remains subject to the terms and
conditions of this Agreement.

 

3. NONTRANSFERABILITY OF UNITS

 

     The Units may not be sold, pledged, assigned or transferred in any manner
except in the event of the Unit holder’s death. In the event of the Unit
holder’s death, the Units may be transferred to the person indicated on a valid
Nordstrom Beneficiary Designation form, or if no Beneficiary Designation form is
on file with the Company, then to the person to whom the Unit holder’s rights
have passed by will or the laws of descent and distribution. Except as set forth
in Section 4, the Units may be settled during the lifetime of the Unit holder
only by the Unit holder or by the guardian or legal representative of the Unit
holder. The terms of the Agreement shall be binding upon the executors,
administrators, heirs and successors of the Unit holder.

 

4. SEPARATION OF EMPLOYMENT

 

     Except as set forth in this section, Units vest and may only be settled
while the Unit holder is an employee of the Company on the vesting date. If the
Unit holder’s employment with the Company is terminated, the Units shall
continue to vest pursuant to the schedule set forth in subparagraph 1(a), and
the Unit will vest only as follows:

 

  (a) If the Unit holder dies while employed by the Company, and the Units were
granted at least six months prior to the date of the Unit holder’s death while
employed by the Company, the person named on the Unit holder’s Beneficiary
Designation form shall be entitled to a prorated distribution with respect to
vested Units based on the period of service by the Unit holder during the term
of this Agreement. If no valid Beneficiary Designation form is on file with the
Company, then the person to whom the Unit holder’s rights have passed by will or
the laws of descent and distribution shall be entitled to settlement of the
Units. If the Units were granted less than six months prior to death, the Units
shall be forfeited as of the date of death with no rights to a prorated
distribution at settlement.

 

  (b) If the Unit holder is separated due to his or her disability, as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
“Code”), the Units were granted at least six months prior to such separation and
the Unit holder provides Nordstrom Leadership Benefits with reasonable
documentation of his or her disability, the Unit holder shall be entitled to a
prorated distribution with respect to vested Units based on the period of
service during the term of this Agreement. If the Units were granted less than
six months prior to separation due to the Unit holder’s disability, the Units
shall be forfeited as of the date of separation with no rights to a prorated
distribution at settlement.

  (c) If the Unit holder terminates employment after having met any of the
requirements set forth below, and the Units were granted at least six months
prior to the termination date, the Unit holder shall be entitled to a prorated
distribution with respect to vested Units based on the period of service during
the term of this Agreement:

 

  (i) the Unit holder was born on or before March 3, 1956 and was eligible for
and received a grant under the Plan in 2014;

 

  (ii) the Unit holder was born on or before March 3, 1961, but after March 3,
1956, and as of March 3, 2014 had 10 continuous years of service to the Company
from the most recent hire date with the Company or a Company subsidiary and was
eligible for and received a grant under the Plan in 2014; or

 

  (iii) the Unit holder has attained age 55 with 10 continuous years of service
to the Company from the most recent hire date with the Company or a Company
subsidiary.

 

       If the Units were granted less than six months prior to termination, such
Units shall be forfeited as of the date of termination with no rights to a
prorated distribution at settlement.

 

  (d) Notwithstanding subparagraphs (a), (b) and (c) of this section, if the
Unit holder’s employment is terminated due to his or her embezzlement or theft
of Company funds, defraudation of the Company, violation of Company rules,
regulations or policies, or any intentional act that harms the Company, such
Units, to the extent not vested and settled as of the date of termination, shall
be forfeited as of that date.

 

  (e) If the Unit holder is separated for any reason other than those set forth
in subparagraphs (a), (b), (c) and (d) above, Units, to the extent not vested
and settled as of the date of his or her separation, shall be forfeited as of
that date.

 

     Notwithstanding anything above to the contrary, if at any time during the
term of this Award, the Unit holder directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director or in any other capacity, engages or assists any
third party in engaging in any business competitive with the Company; divulges
any confidential or proprietary information of the Company to a third party who
is not authorized by the Company to receive the confidential or proprietary
information; or improperly uses any confidential or proprietary information of
the Company, then the post-separation proration of Units and settlement rights
set forth above shall cease immediately, and all outstanding vested but not
settled and unvested portions of the Award shall be forfeited.

 

5. TERM OF UNITS

 

     Units not certified by the Compensation Committee as having vested as of
the end of the Performance Cycle for which the Units were awarded shall be
forfeited.

 

 

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6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

 

     The number and kind of Common Stock subject to this Award shall be
appropriately adjusted pursuant to the Plan to reflect any stock dividend, stock
split, split-up, extraordinary dividend distribution, or any combination or
exchange of shares, however accomplished.

 

7. NO DIVIDEND RIGHTS

 

     Except to the extent required pursuant to Section 6 of this Agreement or
under the terms of the EDCP (for any Units deferred under that plan), ownership
of Units shall not entitle the Unit holder to receive any dividends declared
with respect to Common Stock.

 

8. ADDITIONAL UNITS

 

     The Compensation Committee may or may not grant the Unit holder additional
Units in the future. Nothing in this Award or any future Agreement should be
construed as suggesting that additional Units to the Unit holder will be
forthcoming.

 

9. LEAVES OF ABSENCE

 

     For purposes of this Award, the Unit holder’s service does not terminate
due to a military leave, a medical leave or another bona fide leave of absence
if the leave was approved by the Company in writing and if continued crediting
of service is required by the terms of the leave or by applicable law. But,
service terminates when the approved leave ends unless the Unit holder
immediately returns to active work.

 

10. RIGHTS AS A SHAREHOLDER

 

     Neither the Unit holder nor the Unit holder’s beneficiary or representative
shall have any rights as a shareholder with respect to any Common Stock subject
to these Units, unless and until the Units vest and are settled in Common Stock.

 

11. NO RETENTION RIGHTS

 

     Nothing in this Agreement or in the Plan shall give the Unit holder the
right to be retained by the Company (or a subsidiary of the Company) as an
employee or in any capacity. The Company and its subsidiaries reserve the right
to terminate the Unit holder’s service at any time, with or without cause.

 

12. CLAWBACK POLICY

 

     The Units, and any proceeds (Common Stock or cash) received in connection
with the settlement of the Units or subsequent sale of such issued Common Stock,
shall be subject to the Clawback Policy adopted by the Company’s Board, as
amended from time to time.

     In the event the Clawback Policy is deemed unenforceable with respect to
the Units, or with respect to the proceeds received in connection with the
settlement of the Units or subsequent sale of such issued Common Stock, then the
award of Units subject to this agreement shall be deemed unenforceable due to
lack of adequate consideration.

 

13. DEFERRAL OF UNITS

 

     A Unit holder may elect to defer all or a portion of the Units into the
Executive Deferred Compensation Plan (“EDCP”) in accordance with its terms. Upon
deferral, the vested Units (and their subsequent settlement and payment) shall
be governed by the terms and conditions of the EDCP, as that Plan may be amended
from time to time by the Company.

 

14. ENTIRE AGREEMENT

 

     The Notice, this Agreement and the Plan constitute the entire contract
between the parties hereto with regard to the subject matter hereof. They
supersede any other agreements, representations or understandings (whether oral
or written and whether express or implied) that relate to the subject matter
hereof.

 

     This Agreement may not be modified or amended, except for a unilateral
amendment by the Company that does not materially adversely affect the rights of
the Unit holder under this Agreement. No party to this Agreement may
unilaterally waive any provision hereof, except in writing. Any such
modification, amendment or waiver signed by, or binding upon, the Unit holder,
shall be valid and binding upon any and all persons or entities who may, at any
time, have or claim any rights under or pursuant to this Agreement.

 

15. CHOICE OF LAW

 

     This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Washington, without regard to principles of conflicts of
laws, as such laws are applied to contracts entered into and performed in such
State.

 

16. SEVERABILITY

 

     If any provision of this Agreement shall be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall not
in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision were not contained herein.

 

17. CODE SECTION 409A

 

     The Company reserves the right, to the extent the Company deems reasonable
or necessary in its sole discretion, to unilaterally amend or modify this
Agreement as may be necessary to ensure that all vesting or delivery of
compensation provided under this Agreement is made in a manner that complies
with Section 409A of the Code, together with regulatory guidance issued
thereunder.

 

 

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